Credit union group vows a counterattack on banks.

The largest credit union trade group has declared was on bankers in response to their attacks on credit union chartering policies.

Taking a much more aggressive position than in the past, the Credit Union National Association intends to find ways of blocking state and federal legislation dear to bankers.

Banks' applications for charters, expansions, and mergers also will be challenged, president Ralph S. Swoboda said at the association's annual meeting in Cincinnati.

Credit Unions |Fed Up'

"Over the past couple of years bankers and their trade groups have been initiating a campaign of litigation to harass credit unions," he said. "Credit unions have gotten fed up."

The association, which represents 90% of the nation's credit unions, has not unveiled any legislative proposals.

However, a press release distributed before Mr. Swoboda's speech said credit union groups could testify against interstate bank branching.

Attacks on Several Fronts

This "counteroffensive" has been prompted by banker attacks on several fronts, he said. Banks have argued for taxes on credit unions, and also the regulatory oversight of a banking agency.

More recently, banks - supported by the American Bankers Association - have been filing lawsuits seeking to limit the membership bases of credit unions. Bankers in North Carolina, Michigan, and Montana have sued the National Credit Union Administration, the federal regulator, for widening the membership charters of credit unions in their states.

A Challenge in Utah

Utah bankers have challenged state-chartered credit unions and the NCUA over wide membership charters.

The credit union trade group's legislative and regulatory initiative is part of a three-pronged counterattack authorized by its board of directors. The group also has resolved to provide legal support to credit unions besieged by banker lawsuits and to launch a public relations blitz against those lawsuits.

The trade group already is working with the Utah Credit Union League to develop public relations and advertising campaigns there. In North Carolina and Michigan, it has filed briefs in support of the NCUA.

Bankers lost the case in Michigan and are appealing to the federal appeals court in Cincinnati.

Setback in Court

The Supreme Court earlier this month refused to hear the trade group's challenge to an appeals court ruling involving banks' right to sue the NCUA for granting a charter that widened the membership base of Winston-Salem, N.C.-based AT&T Family Federal Credit Union.

The AT&T case has been sent back to appeal court in the District of Columbia to be tried on its merits. That court had ruled that the banks lacked legal standing.

The association's board agreed to allocate $150,000 for the rest of the year to fund the new strategy. Mr. Swoboda said the amount was requested in anticipation of more lawsuits by year's end, citing Alaska, California, and Illinois as potential battlefields.

|Pressure from a Minority'

Mr. Swoboda stressed that credit unions don't have a quarrel with all banks, and encouraged credit unions to discuss the lawsuits and other banker challenges with banks they do business with.

"The ABA is getting pressure from a minority of its membership," he said. The banking trade group is looking for a "way to curry favor from community banks."

"We don't plan to escalate. We just plan to respond," Mr. Swoboda said.

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