Editorial: Credit unions get congressional help

Congressional action was needed because the Supreme Court in February tossed aside a 16-year-old rule that allowed company credit unions to accept members from other companies. The Supreme Court decision would have stopped many from joining federally chartered credit unions and could have cost them millions of customers.

It was important for Congress to reinstate the ability of credit unions to expand their memberships. For many people, credit unions are the only place they can get low-cost financing. Banks fret that credit unions don't have to play by the same rules as they do, putting them at a competitive disadvantage. Despite their worries, banks aren't hurting. It's estimated that just 6 percent of financial business is handled by credit unions.

The Senate's version is not without its flaws, however. The Senate voted 50-44 for a Republican amendment to eliminate an important provision from the House bill, which would have mandated that credit unions serve lower-income people. As Sen. Paul Sarbanes, D-Md., pointed out, the 1977 Community Reinvestment Act has worked well with banks and should be extended to credit unions.

The House and Senate should work out the differences between the two bills and send this important legislation to President Clinton. The legislation is consumer friendly, giving people another place to turn when seeking reasonable financing.

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