A Supreme Court ruling last week could prevent GW students from opening accounts at the National Institutes of Health Federal Credit Union in the future.
The Court ruled Feb. 25 that credit unions historically have misinterpreted a 1934 law that allowed them to offer membership to groups with a “common bond” such as occupation, association or residence within the same geographic area.
NIH Federal Credit Union originally served only NIH employees, but in 1992 the institution expanded its membership to include GW employees and students. The credit union currently caters to 56 different employer groups.
The American Bankers Association helped bring the case to court, asserting credit unions overstepped their boundaries by expanding membership. More than 70 million people nationwide belong to federal credit unions.
But the Court’s ruling is not the last word in the battle between credit unions and banks. Legislation is pending on Capitol Hill that would allow individual credit unions to serve a broad clientele.
NIH FCU President and CEO Lindsay Alexander said the Supreme Court will send its decision back to the lower court for implementation. The case will return to the D.C. District Court of Appeals, where it originated. Arguments will be heard beginning March 20.
“Right now, we can continue to open accounts for employees and students of the GW community,” Alexander said.
Last year, NIH FCU representatives spoke with Louis Katz, GW’s vice president and treasurer, about providing alternatives to students if the Court’s ruling excluded students from membership at the nearby credit union.
A staffer in Katz’s office said the University is evaluating all the available opportunities. A University credit union financed by NIH FCU is among the options that have been discussed.
“One of our main goals is to maintain credit union service at GW,” Alexander said.
Alexander said credit union attorneys will file for a partial stay against the Supreme Court decisions until legislation can be passed.
Credit union lobbyists have pushed the National Credit Union Membership Access Act in Congress to allow credit unions to extend membership to a variety of employment groups with a common bond.
House Speaker Newt Gingrich and several other Congressmen have endorsed the legislation.
Alexander said all credit unions are stepping up their efforts to push the bill.
“GW members of the NIH Federal Credit Union will receive an insert encouraging them to write to their Congressman in their bank statements at the end of the month,” Alexander said.