Bankers Standing Behind NCUA Court Challenge

WASHINGTON – Lurking in the shadows of this week’s suit challenging NCUA’s new rules on conversions to banks is an adversary the agency has encountered before, but always behind-the scenes; long-time S&L lobbyist Jim Butera. Butera’s Washington firm has represented a Who’s Who of banking interests over the years, most recently the Federal Home Loan Banks of Chicago, Boston and Topeka, the troubled subprime mortgage lender Option One, and now the American Bankers Association. Butera, whose firm is representing the Coalition for CU Charter Options in its suit, also helped draft the unsuccessful bill to reign in NCUA’s authority over conversions to banks. He also represented several credit union-converts before Congress, including Community CU and DFCU Financial. A few years ago, Butera even sued NCUA for another purpose, to recoup severance pay due Karl Hoyle, after Hoyle was fired as executive director. Reached at his office, Butera refused to name any of the credit unions the Coalition claims are participants in the suit, but insisted neither America’s Community Bankers, the S&L trade group prominent in the effort to ease conversions to thrifts, or the ABA are party to the action. Lee Bettis, the former president of credit union-convert AGE FCU who is the spokesman for the Coalition, also refused to disclose the names of any credit unions or contributors to the group. The group’s constituency and whether it has legal standing to challenge the credit union rules is expected to be part of NCUA’s defense.