Date: 1981-05-12
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. the National Consumer Cooperative Bankone of the smallest entities in this cityhas moved to settle its dispute with the forces of the Reagan administration so that It can get on with the Job of meeting a growing loan demand by consumer cooperatives. The settlement calls for the bank to return some $60 million It withdrew on April 21 and 22 with the understandIng that the Treasury Department will Immediately make available about $33 millionthe original apportionment of funds scheduled forthe third quarter. This compromise will allow the bank to start processing loan applications that have been pending for weeks. It means that the bank can operate. The remaining funds. previously appropriated for fiscal year 1981. will be available at the beginning of the fourth quarter. This compromise. Mr. Speaker. is satisfactory providing that there is also a tacitL understandingand I am inclined to believe this is the casethat there will be no behindthescenes harassment of the bank and thatit will be allowed to get on with its business. I am hopeful that the Informal facetoface meetings between bank officials and the administration officials have accomplished this. Frankly. there Is little to be gained from an ongoing dispute. In fact. a bank. eventually dependent on Its acceptance In the private market. cannot long survive If it is subject to assaults from higher officials In the administration. If this compromine brings an end to this campaign. it will have been worthwhile.. There Is no question that the president of the bank acted In a proper manner and after receiving advice of private and Government attorneys. The withdrawal of the $60 million. previously appropriated by the Congress. was within the law and certainly squarely in keeping with the Intent of the legislative branch that the stock purchases be made. In fact. the president of the bank was the only one displaying a legal opinionthe Comptroller Generals opinionsupporting her actions. The administration never produced a legal opinion from an objective source: only vague references to "our attorneys have a different opinion." Mr. Speaker. also by now I think everyonethe administration and the press Includedrealizes that all actions taken by the bank and its officials have been right out in the open. Notices beforehand to everyone. No longer. I hope. will we have people In responsible positions saying they did not know what was going on. That simply does not wash and at some point we may learn why the slumbering- giant of Government awoke some 3 weeks after the Comptroller Generals opinion was released publicly. . Despite the strong legal position of the bank. it probably did the right thing in compromising the dispute. It would be difficult. Indeed. to suggest to this little bank thatt it should fight through long court battles to justify its actions. The political and legal resources of the administration are simply too massive and in the end the bank could have destroyed itself against the rocks of legal righteousness. The important thing now Is that consumer cooperatives have an opportunity to thrive and have a source of loan funds provided by the National Consumer Cooperative Bank. While the dispute raged. the 45 days of Impoundment allowed by the Budget and Impoundment Control Act have run and this means that not only title I moneysstock purchasesmust be released. but also funds impounded for title II. selfhelp development and technical assistance. -Thus the combination of time and compromise have today made the bank almost whole again. It should also be noted that the House Appropriations Commidttee has endorsed continuation of the bank and has included funds for the - operations of both title I and title II In the bill coming to the floor this week. The House. we are hopeful. will endorse the committees action. IMr. Speaker. it is essential that this bank be given stability so that it can perform itsq functions and so it can get on with the efforts to repay the Governments inirestment. Other Federal credit programs. particularly those operated through the farm credit system after which the Consumer Bank is modeled. were allowed to operate with stability and without interference through many changes of administration. The Consumer CoOp Bank deserves no less.*