The New York State Credit Union League believes its future crosses borders.
The New York league, like some others across the country, is looking to increase its joint operations with neighboring states to provide more services to credit unions, league president Charles M. Whitney said in an interview at the association's annual convention last week. The meeting drew about 800 credit union officials to the Marriott Marquis in Times Square.
"We feel to be successful in the future we have to bring volumes to the table to bring costs down," Mr. Whitney said. "So we'll work with neighboring states to bring services to them."
The Empire State league already has several relationships with other leagues. For example, New Jersey, Massachusetts, and Connecticut all have signed onto CU-24, the league's automated teller machine network. New Jersey uses New York's mortgage service, and the Garden State and Vermont both use the league for credit cards.
There are different levels of participation. Leagues can either contract for the services or they can invest in the corporation and acquire both a stake and voting rights.
Mr. Whitney said although he sees joint ventures or consolidated service centers spreading to more leagues in the future, the core organizations will remain to provide for state-level lobbying.
"We don't go in with a Pac-Man mentality," he said.
Meanwhile, the league is looking at helping its members take advantage of new technology. For example, the association now has a pilot electronic communication system in place where credit unions can call up regulatory or legislative information on a personal computer.
"Some credit unions probably don't want to get involved with the new technology," Mr. Whitney said. "If they provide a niche, they'll survive. If they don't provide a niche, and the members demand the new technology, they will fall by the wayside."
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Given the current regulatory environment, collateralized mortgage obligations may be more hassle than they're worth, a credit union investment adviser said.
"In a lot of cases you have to ask, 'Is it really worth the headaches from the regulator?'" said Charles Prather, senior investment officer for Corporate Network Brokerage Services.
The National Credit Union Administration took a tough stand on CMOs as interest rates rose over the last year.
The agency has forced credit unions to divest CMOs that fail stress tests. It also has tested managers' understanding.
Later this year the agency is expected to issue regulations imposing asset-liability management standards on CMOs and similar instruments.
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A forum for executives who run credit unions larger than $20 million of assets turned into an NCUA bash-athon.
Most of the criticism was directed at the agency's proposed corporate credit union rule, which would tighten the liquidity centers' investment standards and beef up their capital.
Joseph Herbst, president and chief executive of Empire Corporate Federal Credit Union, said the proposal would increase its costs and hurt returns to customers.
He said the corporate had sent booklets to credit unions that outlined the proposal's effects and explained how to write opposition letters to the agency.
"You shouldn't let NCUA push us around because they're going to do (regular) credit unions next," Mr. Herbst told the roughly 30 people attending the session. "They're looking definitely to micromanage."
Roger Youngs, president and chief executive of Power Federal Credit Union in Syracuse, said the ghosts of the thrift crisis are driving the agency's actions.
Mr. Youngs said that NCUA Executive Director Karl Hoyle - who had been a high-ranking official at the Federal Home Loan Bank Board during the height of the savings-and-loan meltdown - is pushing much of the agency's agenda.
Mr. Hoyle "thinks, 'My fingerprints are all over what happened with that and I can't let that happen again,' " Mr. Youngs said.
