NCUA Mulls Next Step In Community CUCase

ALEXANDRIA, Va. - (08/19/05) -- While they wait the two weeks or soit takes for the U.S. Magistrate's recommendation on the CommunityCU case to be formally adopted by the U.S. District Court,regulators at NCUA will be discussing with their lawyers at theDepartment of Justice and the credit union trade groups whetherthey should appeal the decision. To do so has legal perils, as wellas political ones, according to participants in the case. The legalperils are that a higher court could decide to strike down all ofNCUA"s new regulations on credit union conversions, as MagistrateDon Bush threatened to do at Wednesday's hearing in the remoteDallas suburb of Sherman, Texas. The political perils are that thefestering resentment among some lawmakers over NCUA's actions inthe Community CU case could hurt lobbying on regulatory relief andCURIA that would expand NCUA's powers in several ways. At least onecredit union lobbyist said he will advise the agency to drop thecase and not drag it out with an appeal, because of the potentialpolitical costs. NCUA would not comment on the case, referring allinquiries to the Department of Justice. A spokesman there said theyare still digesting Wednesday's ruling by theMagistrate.