Bankers See Through NCUA Transparency Bid

WASHINGTON – In an unusual paring, the banking lobby joined the credit union groups yesterday in calling on NCUA to withdraw its proposal to increase member access to books and records–but for different reasons. The credit union lobby, both CUNA and NAFCU, urged withdrawal of the proposal because they said it would be too intrusive and open up internal records to all kinds of potential mischief; while the bankers said it would unfairly boost members ability to thwart conversions to mutual savings banks. “We are concerned that the proposal would be used by well-funded outside interest groups that do not have meaningful ties to the credit union involved,” Krista Shonk, regulatory counsel for America’s Community Bankers, in a comment letter submitted on the proposal. “We are aware that such groups exist and that they philosophically oppose any credit union conversion to a mutual savings bank. We believe that the proposed rule would enable these groups to disrupt preliminary discussions and due diligence about this charter alternative and would discourage a credit union board from fully exploring all strategic charter options.” In a separate comment letter, Rose Oswald Poels, vice president of the Wisconsin Bankers Association, said her group “believes NCUA’s purpose is to create heavier burden on an FCU to deter its conversion to a mutual savings bank.” But Lloyd Marbet, an Oregon activist who helped defeat the proposed conversion of Columbia CU, applauded the proposal and recounted how the credit union board and management used the credit union’s vast financial resources to thwart popular efforts to obtain records concerning the failed conversion for three years. Credit union records showed that well more than $1 million was spent by the credit union on legal fees to support the conversion. “To this day,” wrote Marbet, “all CCU members, except for the conversion Board of Directors, have been effectively blocked from reviewing how such costly decisions were made.”