Banks' Promise In 1998 (To Attack At State Level) Is More Than Apparent Five Years Later
ONE: NCUA passes expansive FOM rules, approving the concept of "reasonable proximity" and creating the TIP (or Trade, Industry, Profession) charter. Not surprisingly, the bank trade groups are sharply critical of the new interpretation. NCUA approves the largest FOM in Utah for Tooele FCU and OKs international branches. Saying NCUA has "gone too far" banks in Utah file a lawsuit against the agency.
TWO: Identity theft develops as a significant threat to many people (see related story, left).
THREE: Banks ratchet up the attacks at the state level, especially in Utah, where Beehive State's CUs are set abuzz when bankers there declared war on CUs and the state legislature passes a bill to halt all business lending by CUs. Once the home of statewide FOMs, Utah CUs are able to dodge a corporate taxation bill in this session however. The state's three largest CUs (Mountain America, America First and Goldenwest) apply to convert to the federal charter as a result). The Utah league hires director of state Republican party as lobbyist. The tax fight later spreads to Iowa and Oregon. Other states facing strained budgets also consider a tax on credit unions, including Iowa, California and New Mexico. The budget gap in Illinois prompts legislature to double state CU supervisory fees and commingle them with other revenue, leading CU reps to call it a "back door tax."
FOUR: The GAO issues a report that foresees the disappearance of the middle class at CUs, finding a gulf between very large, diversified institutions and the small, so-called "mom and pop" variety credit unions.
FIVE: The boom in mortgage refinacings that began in 2002 ($1.2 trillion) continues its climb in 2003 ($1.4 trillion) and is credited by Mark Zandi of Economy.com with "keeping the economy together." There is much debate among credit unions and economists over how long the real estate market can continue to appreciate and over how much money members and consumers should be taking out of their homes. Among others, Wescom CU and Washington State CU both begin to offer rebates on real estate commissions.
SIX: Bank lobbyists push to expand the maximum number of bank shareholders required for Subchapter S to 150 from 75. The tax benefits may cause some 2,000 more banks and thrifts to file for such status, analysts predict.
SEVEN: NCUA places the $5 million D. Edward Wells FCU in Massachusetts into conservatorship. While Carol Aranjo, CEO and former chairwoman of the National Federation of Community Development Credit Unions is in Washington railing against NCUA's "abusive authority," some 150 of the CUs members were picketing at its headquarters in Springfield, Mass. Aranjo and others were later charged with crimes.
EIGHT: Discarded computer hard drives that were not completely scrubbed of member data make it necessary for Power FCU to begin new security procedures.
NINE: Rainier Pacific bank, formerly a credit union, goes public, earning insiders $7 million on the first day of trading.
TEN: Bank attacks against CUs reach a "new low" says one CU CEO when Frances Slocum Bank runs ads showing fighter jets, claiming "freedom isn't free" and that tax-paying banks are more patriotic. CUs respond in separate ads.