By Ray Birch
WASHINGTON—Larry Blanchard recalls Sen. Alfonse D’Amato delivering an ultimatum to credit unions that would determine the fate of the Credit Union Membership Access Act—and in many ways, the entire credit union community in the U.S.
Blanchard was sitting in a Senate hallway in May of 1998 when Sen. D’Amato (R-NY), then chair of the Senate Banking Committee, delivered an important message to the leaders of the Credit Union Campaign for Consumer Choice, the unified effort of CUNA, NAFCU and the leagues to support the passage of the credit union backed legislation—HR 1151--that would allow for field of membership expansion.
“What most people talk about post-HR 1151 is the MBL cap and prompt corrective action—the bitter pills we had to take,” Blanchard told CUToday.info. “What most people don’t know, however, and should know, is that when the legislation came through the House and went to the Senate Banking Committee is that Senator D’Amato walked into the hallway and told (then CUNA President) Dan Mica, Bill Hampel, (then NAFCU President) Ken Robinson and me that credit unions had a choice—either accept the MBL cap and PCA or the bill would die. The situation was that black and white.”
Blanchard said that D’Amato told the group that they shouldn’t worry about those two additions to the CU Membership Access Act, since D’Amato said he would work to remove them in the following year.
“He told us that we will add MBL and PCA to get the bill out of committee and that he would come back next year and fix things,” said Blanchard. “We had an important decision to make—do we go forward and try to roll over the Senate Banking Committee, or do we accept Sen. D’Amato at his word. So we took his word, as the bill would have died otherwise. That was the historical reality of what was going on right then.”
Schumer Defeats D’Amato
But in the November elections D’Amato was defeated by Chuck Schumer, who continues to hold the seat.
“He was never able to come back and fix things,” said Blanchard.
Of all the players in the two-year fight for the CU Membership Access Act, Blanchard played one of the most pivotal roles. After the trade associations were struggling to make any progress with separate efforts of their own, Blanchard was selected to lead a united effort that included CUNA, NAFCU and the leagues around one common theme and campaign, which many cite as a key reason why the Act was passed by the Senate and signed by president Bill Clinton in 1998.
Blanchard, who was with CUNA Mutual at the time, chaired the five-person steering committee that included the CEOs and chairs of CUNA and NAFCU.
“When all this was happening in the late ’90s, the general consensus is that CUNA could have gotten it done, NAFCU could have gotten it done. And the leagues could have gotten it done. But if all three worked on this independently, coming up with different strategies, all three efforts would have been undermined,” said Blanchard. “The goal was for all of us to come together. We did, and it worked.”
Large credit unions wanted one common message—they saw the problems that would have been created by conflicting messages, Blanchard explained.
“In 1996 CUNA and NAFCU were asked by the National Credit Union Roundtable to meet in Chicago to talk about next steps as the court action was headed to the Supreme Court,” recalled Blanchard, referring to a lawsuit over field of membership that had originally been filed in North Carolina and then appealed all the way to the highest court. At the heart of the litigation was how the concept of common bond as expressed in the Federal Credit Union Act should be interpreted, and, most critically, whether a credit union could serve more than one occupational group having a single common bond. The original defendant was what was then called AT&T Family FCU, before it was replaced by NCUA.
“The big credit unions said they were worried that CUNA and NAFCU needed to come together to achieve victory, especially if we ended up with an adverse decision from the Supreme Court, which happened. The big credit unions asked Dan Mica and Ken Robinson to have the trade associations join sides on this, and they both agreed to that.”
Bringing Both Sides Together
The Roundtable credit unions then said that an individual was needed to bring both sides together.
“CUNA Mutual loaned me out,” said Blanchard, at the time SVP of communications and PR at the company, having previously worked for NAFCU. “I then also became the executive director of the campaign.”
CUNA and NAFCU then asked Blanchard to pick a person from each trade association to work closely with him.
“I chose CUNA General Counsel Kathy Thompson and Pat Keefe from NAFCU,” said Blanchard. “I found them both to be very smart and very frank—we had no time for politics. I just wanted good, honest feedback and cooperation. These two were the epitome of what we needed.”
Despite the team at the top being united, was it easy to get both sides—accustomed to competing with each other—to work together?
“We would have regular meetings, set up teams with representatives from CUNA, NAFCU and the leagues on them,” recalled Blanchard. “We had legislative and communications strategy teams, for example. And we all worked together and tried to reach agreement on how we would move forward, and we did.”
That led to the effort being called the Campaign for Consumer Choice, a theme that Blanchard said was critical to success. He said both sides agreed that having a theme that attacked bankers would not be as effective in Washington as one that focused on the financial needs of people.
Candid Debate
But Blanchard said there were disagreements–“candid debate,” he called it–among the two sides of the campaign.
“Yet we had a common goal and we knew we had to work together. And when there were differences we addressed them immediately by sitting down together and working things out,” said Blanchard. “Once there was agreement on direction and strategy it was pretty much teamwork after then. We were together on a daily basis.”
For much longer than anyone expected. Blanchard said the group worked almost seven days a week for 22 months.
Blanchard credited the state leagues for playing a large and important role in the campaign.
“This was a grassroots effort, and the leagues were pivotal in getting this done,” he said. “They had direct access to the credit unions who had direct access to the members.”
And the members responded, emphasized Blanchard.
“Once people learned about what was going on they got upset,” he said. “Members called the White House and Congress. We then actually got calls from the White House and Congress saying their assistants are overwhelmed and please call off the hounds.”
Blanchard said the Campaign for Consumer Choice was the perfect example of what credit unions can accomplish when all sides of the movement work together. He recalled how quickly the group was able to mobilize CU leaders and members from around the country to come to Washington.
“After the bill got through the Senate Banking Committee it was delayed on the Senate floor, waiting for a vote,” said Blanchard. “Sen. D’Amato called and said you guys need to get the Senate’s attention and asked if we could hold a rally at the front of the Capitol building. So in July of 1998 we got about 7,000 CU folk to come together in Washington. That happened in about six days. For Operation Grassroots we had 15,000 people come to D.C., but that took a year-and-a-half of preparation.”
1998 Rally
The 1998 rally was “huge,” said Blanchard. “That got the Senate’s attention and the bill flew through with a 94-6 vote. Then it went on to President Clinton for his signature and it was all done. Thank God it was.”
Blanchard and credit unions were thankful for the outcome, especially given the alternative.
“There really was no Plan B had our effort failed,” said Blanchard. “We knew this was critical to the future of credit unions. Defeat was unimaginable. We fought this in the courts for years and lost. Then it was up to Congress. That was it; it was that dire.”
Blanchard said that had HR 1151 not been passed, not only would credit union growth have been far different from where it stands today, at 100-million-plus members, but the movement could have been forced to take a step backward in 1998.
“Credit unions could have been forced to spin off SEGs and other groups that had been added to fields of membership under the previous interpretation of the rule,” said Blanchard.
Blanchard estimates that had the Act not passed that CU membership today might be 50 million. He believes that the Campaign for Consumer Choice—all those who supported it—could not have done any more.
“That’s the truth. We did all that we could and held nothing back,” said Blanchard, who said he enjoyed his days working to give more consumers access to credit unions. “Were we behind the eight ball when the campaign began? That is hard to say. But what I know is we could have done little more. What we did from August (1997) to the Supreme Court ruling and on into the following year was very, very organized and effective. I am not sure that even if we started three years earlier than we did we could have done more.”
Blanchard retired from CUNA Mutual Group in 2008 as a senior vice president, but still does work for the company as a consultant.