ORLANDO - A key lawmaker has told credit union officials that a merger of bank and thrift charters could mean more attacks on credit unions.
Rep. Bill McCollum's dire forecast at the Florida Credit Union League's annual convention this month contrasted with the generally upbeat atmosphere.
The Florida Republican said a merger of thrift and bank charters is on the table as Congress ponders ways to bail out the thrift insurance fund. If the charters are merged, he said, credit unions will find themselves under fire.
"As you become the only other financial institution distinguished from a bank that exists in the United States, banker complaints are going to grow louder," Rep. McCollum said.
Wide membership bases will be a chief target, he added. Bankers want credit unions with loose membership requirements to be stripped of such privileges as the tax exemption. Banks argue that "it should be one way or another," he said.
Rep. McCollum also cautioned the convention, held Aug. 17-19, about a bill backed by Sen. Alfonse D'Amato, R-N.Y., to let the National Credit Union Administration have a say over what powers federally insured, state- chartered credit unions could exercise.
Though this companion bill has yet to appear in the House, Rep. McCollum predicted provisions of the bill might get slipped into a larger piece of banking legislation during a conference session.
The thrust of the D'Amato bill is "logical," Rep. McCollum said, but he hasn't decided whether he supports it.
"I caution you not to be lax about this," he said. "Tell me your thoughts about this."
If the Florida league and the Credit Union National Association are indicators, credit unions - at least state-chartered ones - oppose the bill.
Some Florida institutions that were privately insured until the early 1990s resent the federal oversight they deal with now. A manager of one complained that federal examiners are merely "trainable" rather than "educable."
Brenda Jo Seipel Jacob, vice president of state governmental affairs for CUNA, the industry's largest trade group, said giving the federal government more oversight of state institutions would undermine dual chartering and stifle creativity in the industry.
"State and federal credit unions have too much at stake" in dual chartering, she said.
Still, such worries could scarcely cloud the sunny convention atmosphere.
Credit union officials had plenty to be happy about. The industry's capital levels have never been higher, its delinquency levels have never been lower, and its return on assets still tops 1%.
"It's not the best of times and worst of times," said Wendell A. Sebastian, chief executive of GTE Federal Credit Union and one of about 1,000 attendees. "It's the best of times."
NCUA Chairman Norman E. D'Amours gave a low-key speech. Rather than knocking credit unions for not fulfilling their mission of lending to "people of small means" or attacking industry trade groups, Mr. D'Amours predicted that credit unions will get a rebate from the insurance fund this year and possibly next year. He also encouraged credit unions to attend a conference the agency will hold next year on lending in poor areas.
Although the agency and the Madison, Wis., trade group apparently aren't taking shots at each other at the moment, a closing-day speech by CUNA chairman Gary Janacek made it clear that their fingers are still on the triggers.
"Mr. D'Amours has spent much of his time bashing credit union organizations and trying to drive wedges between us," Mr. Janacek said. "Credit unions will resist attempts" to do that.
