The country's largest credit union plans to leave the Credit Union National Association unless the trade group drops its lawsuit against the federal government.
The directors of Navy Federal Credit Union voted March 15 to drop out of the Virginia Credit Union League and, by extension, CUNA unless the two groups agree to withdraw their lawsuit within 10 business days.
With this move, Navy joined a growing number of credit unions that have protested policies of CUNA or the state leagues by withdrawing or taking other action.
This month, Pentagon Federal Credit Union, the country's fourth-largest, left the Madison, Wis.-based trade group. It - like Navy Federal - opposes CUNA's lawsuit against the National Credit Union Administration. The suit seeks to block a regulation ending shared management between corporate credit unions and trade groups.
"Our desire in life is to have (the lawsuit) go away and have a return to normalcy," said Tom Hughes, president and chief executive of Navy Federal. Mr. Hughes said he was concerned that fallout from the lawsuit could lead to either new regulation or legislation.
"We're very disappointed with Navy's decision," CUNA president Ralph Swoboda said in an interview.
However, he said, he doesn't see the beginning of any trend toward disaffiliation.
"Since the beginning of the year, affiliation has been up," he said. "CUNA is the only trade association that represents all types of institutions, and it's inevitable when you take on critical issues" that some will be displeased.
At least three credit unions in Texas have dropped out of the league there or are considering it, sources said. Credit unions belong to CUNA through their membership in a state credit union league.
At least one of the Texas institutions, Security Service Federal Credit Union, left because of the lawsuit.
Meanwhile, 20 Wisconsin credit unions have expressed their dissatisfaction with their league by paying dues monthly, instead of annually.
University of Wisconsin Credit Union, the state's largest, joined in for moral support.
Credit unions "indicated they were not receiving service of the quality they expected," chief executive Don Percy said.
