The Original Sin of HR 1151

Editor’s Note: This is the first in a three-part series

By Ed Speed

The ancient story of Adam and Eve found in Hebrew scripture recounts their fateful encounter with a serpent, who tempted them to eat from the Tree of Knowledge. St. Augustine of Hippo later labeled this act as “original sin”—a concept not just about disobedience but about the human desire to transcend limits, to seek more than what was intended.

This story is not just religious allegory; it is a profound metaphor for human nature. Whether through psychology’s modern lens of “Fear of Missing Out” (FOMO) or ancient theology, the theme remains the same: an insatiable craving for more often leads to unintended destructive consequences.

Reflecting on my 40-year career in the credit union movement I see an unsettling parallel. The passage of HR 1151, the Credit Union Membership Access Act, in 1998 marked a turning point. What was meant to be a victory—the legislative protection of credit union membership—became the moment when the industry lost its way. In hindsight, it was the moment credit unions bit into their own forbidden fruit, seeking “more” and more and more in a way that has led them further from their mission.

The Road to HR 1151

By the 1970s the credit union landscape was shifting. Once deeply rooted in common bonds—workers within the same company or community pooling resources—the movement faced an existential threat. Deindustrialization in the Rust Belt wiped out manufacturing jobs and, with them, countless employer-based credit unions. The National Credit Union Administration (NCUA) and the Credit Union National Association (CUNA) saw the writing on the wall: survival depended on expanding fields of membership.

In 1982, the NCUA issued Interpretative Ruling and Policy Statement (IRPS) 82-1, formally allowing credit unions to expand beyond a single common bond. This ruling, later expanded with IRPS 82-3, transformed the industry, allowing credit unions to grow by adding employer groups into broad “select employee groups” (SEGs).

Banks, alarmed by this rapid expansion, fought back. After years of legal battles, the Supreme Court ruled against NCUA’s expansive interpretation of membership rules in 1998. The ruling threatened to disenfranchise millions of credit union members. The movement responded with an unprecedented lobbying effort to pass HR 1151, ensuring credit unions could maintain their expanded membership model.

A Pyrrhic Victory?

HR 1151 passed overwhelmingly—411 to 8 in the House and 92 to 6 in the Senate. It was a landslide win. This level of support was akin to the vote to enter Word War II.  Credit unions, and especially the trade associations, had proven their political muscle. They secured their future, protected their ability to grow, and emerged as a formidable financial force.

But as history often shows, success can be a dangerous thing. What was a necessary battle for survival became the gateway to excess. The victory fueled a hunger that had little to do with serving members and everything to do with institutional power.

Credit unions, once driven by purpose, began chasing expansion for expansion’s sake. The sacred notion of a common bond—once the bedrock of the movement—began to erode.

What followed was a slow but steady transformation, one that would lead the industry far from its original mission.

Up Next: How Tribalism and Trade Associations Changed the Movement

The passage of HR 1151 was just the beginning. In the aftermath of victory credit unions didn’t just compete against banks—they turned against each other. Next, we will explore how tribalism and trade associations fueled internal division, setting the stage for the identity crisis that defines today’s credit union industry.

Edward Speed is the retired CEO of a multi-billion-dollar credit union, who holds a Masters Degree in Theology.   These days he spends his time serving food, washing dishes and sweeping floors at a Catholic Work House helping homeless senior citizens.