NAFCU Already Acting To Support State-Level Fights

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Frank Diekmann's March 3 column ("It's time for federal credit unions to return the favor") suggests that now is the time for federally chartered credit unions-and specifically NAFCU-to come to the aid of state-chartered credit unions in their fight against banker-inspired bills to tax state credit unions. Mr. Diekmann asserts that, "State charters that stepped up to the plate on behalf of federals (during HR 1151) are now wondering if the feds will go to bat for them."

During the Credit Union National Association's (CUNA) most recent Governmental Affairs Conference (GAC), the National Credit Union Legislative and Regulatory Coordinating Council (made up of top leaders from NAFCU and CUNA) met to discuss current issues of concern to credit unions. Frequently, these meetings do not draw a great deal of attention, but they are vital for exchanging ideas as well as presenting concerns and view points between the two principal trade associations representing the credit union community. At this meeting, CUNA Chairman Barry Jolette described the ongoing threat to credit unions on the state level.

NAFCU believes that actions being taken by the bankers at the state level are both well-calculated and artfully designed to divide credit unions by size and charter, as well as to divide credit union resources. The bankers' actions are, therefore, very serious, with potentially far-reaching implications for all credit unions-regardless of charter. In response to Barry Jolette's remarks, I voiced these concerns and indicated that if CUNA believed that they needed assistance that such would be explored with the NAFCU board.

It is no secret that many NAFCU members also belong to their state leagues, so they are no doubt aware of the need to act in those states where the bankers have introduced credit union taxation proposals. I am also confident that they have stepped to the plate in any call to action issued by CUNA to respond to the bankers' attacks. NAFCU members, if nothing else, follow through on their convictions and are by no means shy in expressing their opinions.

As Mr. Diekmann correctly notes, NAFCU is a direct membership association that is federally focused, with fewer resources than CUNA. NAFCU has, however, not been hesitant to step into the fray on issues that impact both federal- and state-chartered credit unions where NAFCU believes that a state's action might serve to adversely impact the entire credit union community. Where NAFCU has entered the conflict the effect has been striking. A very good and recent example was our very successful effort, along with other financial groups, to challenge the California state law on credit card disclosures that had been scheduled to go into effect July 1 of last year. When the lawsuit was filed, there were, no doubt, those in California who saw this as a states rights issue.

NAFCU's immediate concern was the negative affect on federal and state- chartered credit unions because the implementation of this law (an injunction was granted and the case is on appeal) would have potentially resulted in significant new costs to any credit union with members in California. The good news is that eventually all credit union trade groups-NAFCU, CUNA and the California League-worked with a common purpose to successfully block this law.

NAFCU believes that the tax threats in several states today represent a serious threat to all credit unions. As we have done in the past, and will continue to do in the future when deemed necessary and appropriate by the NAFCU board, NAFCU will continue to intervene in rebutting efforts to harm credit unions and credit union members whenever and wherever that threat arises. As Mr. Diekmann correctly notes, NAFCU may not have the resources of CUNA, but we can and do often bring considerable firepower to bear.

Fred Becker, President-CEO National Association of Federal Credit Unions Arlington, VA

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