Capitol Hill Renews Scrutiny Of CUConversions

WASHINGTON - (01/31/06) NCUA has denied approval for ballotswith which members of DFCU will vote whether to convert to mutualsavings bank, touching off a new round that already hasreverberations in Congress. Representatives of the $2 billionDearborn, Mich., credit union has hired super lobbyist Jim Buterato argue their case that NCUA is being heavy-handed. Butera,lobbyist for several Federal Home Loan Banks, thrift giant CharterOne and even failed hedge fund Long Term Capital Management,represented Texas credit union giant Community CU in a successfuleffort last summer to turn the congressional heat on NCUA. It wasthe congressional pressure combined with an adverse legal ruling inthe Community CU case that eventually forced NCUA to reverse courseand approve the conversions of Community CU and OmniAmerican CU tobanks. Butera also lobbied Rep. Patrick McHenry, R-N.C., tointroduce a bill that would restrict NCUA¡¦s powersover credit union conversions. That bill is still pending beforethe House Financial Services Committee. Representatives of DFCUtold The Credit Union Journal Monday the member disclosuresproposed for DFCU are identical to the ones eventually approved byNCUA for the two billion-dollar Texas conversions.¡§It¡¦s exactly the same. The names aredifferent but the facts are the same,¡¨ said one DFCUrepresentative.