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Ralph Nader > In the Public Interest > An Unlikely Alliance as Consumer Co-op Bank Bill Passes

Something happened a few days ago in the U.S. Senate that was more than good for consumers.

By a vote of 60 to 33, the Senate passed a bill to establish a National Consumer Cooperative Bank that would provide credit and technical assistance to a wide variety of consumer co-ops. In doing so, the Senate majority was composed of a most unlikely combination of senators. And that was good for the Senate.

Alongside Senate progressives such as Gaylord Nelson, Paul Sarbanes, Dick Clark and John Durkin were Senators Robert Dole, Robert Griffin, Russell Long, Strom Thurmond, S.I. Hayakawa and Herman Talmadge. The latter senators have not been known for their support of consumer causes over the years. Their consumer voting record, in fact, has been poor.

But the call of the consumer cooperative, with its tradition of self-reliance and its association with farm cooperatives, was too strong for them to resist.

Indeed, Senator Hayakawa from the beginning of his days in the Congress has been an articulate supporter. During the debate he cited his long memberships in co-ops, his writings on cooperatives, the pro-consumer innovations of food co-ops, and the leadership of the Berkeley Co-ops in hiring Japanese-Americans after their disgraceful treatment during World War II.

Senator Robert Dole finally revealed that his wife, Federal Trade Commissioner Elizabeth Hanford Dole, has some influence over him.

Recalling Senator Robert Taft Sr.’s comment that cooperatives “are as American as apple pie,” Dole told the Senate that “by providing assistance financing and technical assistance we can help consumers help themselves.” Inasmuch as the jocular Dole has been casting one anti-consumer vote after another since he came to the Congress, consumers had better help themselves.

Opposition to the co-op bank bill was strong and from expected sources–the National Chamber of Commerce and small business lobbies. But the coalition behind the bill was stronger. Consumer, cooperative, labor, religious, elderly and civic rights groups worked together with unprecedented smoothness.

The existence of both consumer and producer cooperatives around the country lent significance to the belief that, without organized economic power, citizens are at a disadvantage politically. The success of a large optical co-op and an auto repair co-op in Michigan may have made Senator Griffin’s supportive vote easier, for example. Kansas farm co-ops certainly made Senator Dole’s decision less a lip-biting matter.

The biggest loser in the Senate debate was Senator Richard G. Lugar, R-Ind. He proposed and overwhelmingly lost four amendments designated to cripple the co-op bank’s effectiveness, in the name of helping small businesses. Co-ops are small business; they help other small business whether in depressed center cities or in rural areas, several senators responded.

A majority thought it was time to end the commercial banks’ discrimination against consumer co-ops. The forthcoming co-op bank would provide non-subsidized loans to co-ops, based on an initial Treasury Department capitalization that would be repaid. The bank then would go into the private money markets to carry out its mission. Eventually the co-ops would own the bank completely and the repaid government would phase out of its operations entirely.

Once in operation, there remains the continuing need for the bank to be responsive to low-income co-ops and accountable to a diversity of co-op needs in food, housing, health, repair and other service areas.

Because of the efforts made by the chief Senate sponsor, Senator Thomas McIntyre, D-N.H., there is wording in the legislation to secure that sensitivity. Supportive language during the Senate debate also was contributed by Senator Donald Riegle, D-Mich.

But it will be up to the consumers to turn the National Cooperative Bank into a historic beacon of consumer justice. In the coming year, while the bank is being established, consumers who want to start co-ops should get busy organizing their community. Readers may wish to write for guidance to the Cooperative League of the U.S.A., 1828 L Street N.W., Washington, DC 20036. For soon they will be able to find at least one bank with its door open for consumer cooperative business.