No Need For The Alamo; Albuquerque Will Do Just Fine

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To hear some tell it, when state-chartered credit unions and their regulators meet this week, they're doing so in the wrong part of the Southwest. These same folks will suggest that while NASCUS is holding its annual meeting in Albuquerque, it ought to be in San Antonio, and more specifically, at the Alamo, since the state charter is supposedly under siege.

Those Chicken Littles are getting it wrong (and are not related to Roger Little, who happens to be NASCUS' chairman).

"With what has happened in Utah, some people have said there's a flight to (federal) charter, and that's not an accurate term," said NASCUS President Mary Martha Fortney, referring to some former state-chartered credit unions in Utah that switched to federal after that state passed some very unfavorable and restrictive laws for credit unions. "The same thing happened in the late 1990s when the federal charter suffered and people said there was some type of flight from federal to state. While it happened, it didn't really happen that much."

A bigger concern, said Fortney, would be if either option ever disappeared, as if your soda pop choice one day was Coke or...Coke. For obvious reasons, NASCUS has always made a high priority of stressing the value of the dual charter option (while NCUA officials often do the same, you never get the feeling they really mean it).

"We think there are such benefits from the dual charter," explained Fortney. "The (federal) member business lending regulations are clearly the result of the state member business lending rules. The states are the laboratory. If something works in Texas or in a couple of other states, then (NCUA) is able to look at it and see that maybe this is worth trying. We're not really worried about (the end of the state charter option)."

For Fortney, this week's annual meeting at the Albuquerque Marriott will be her first since being named officially as the association's CEO, although she was named acting CEO in August of 2003. Since being named as CEO to replace Doug Duerr in January of this year, Fortney said her board has charged her with a number of things, not the least of which is raising the profile of a trade group often overshadowed by CUNA and NAFCU.

"We've had some initial success in raising our prominence and visibility," said Fortney. "We've become more involved with Congress on state credit union matters. (Michigan regulator) Roger Little has testified before the House and Senate on regulatory relief. NASCUS needs to be considered as an association with a view that Congress needs."

To that end, earlier this year Fortney named Sandra J. Troutman as EVP for government relations, replacing long-time Washington lobbyist Jonathan Lindley, to work with Congress. Troutman had been with WesCorp in California and has most recently been meeting with Idaho Sen. Mike Crapo, who is on the Senate Banking, Housing and Urban Development Committee.

Fortney said she was named to the post in part because of her own long experience in Washington. She worked on Capitol Hill for 12 years before joining NASCUS 11 years ago. "The board felt my experience would help deliver what we're endeavoring to do at NASCUS," said Fortney. "This is not going to happen overnight, but we are increasing our communications and delivering more information."

She said NASCUS' board also wants to see the group do a better job of "building relationships with the credit union community." In other words, more cooperation among the cooperators. "I felt there was some room for growth there," she said.

NASCUS, which amazingly survives today after initially being called the Association of State Credit Union Supervisors (figure out the acronym for yourself), was formed in 1965. In the 1980s it expanded to form an Advisory Council of credit unions and by the 1990s, after recognizing there are just a finite number of states, it reorganized and officially formed a Credit Union Council (it says 800 credit unions now belong), opening up a new dues-revenue stream and at the same time bringing together credit unions and their examiners under one umbrella.

While it sounds like it has all the makings for a good reality show (Coming soon to CBS! Survivor: The Regulated and the Regulators On Compliance Island), Fortney noted it hasn't been like that. "People might call it a struggle, but I have not seen it. They work well together. As a group we've never felt we were serving two masters," she observed, disagreeing with the specious arguments some have made. "Obviously, we are working together on many of the same priorities: the taxation challenge, UBIT, pre-emption of state laws and regulations. We're still very committed to alternative capital reform and the risk-based capital proposal that NCUA supports."

Speaking of NCUA, Fortney added that NASCUS would like to see a state regulator appointed to the vacant slot on the NCUA board. "There's nothing to prevent it," noted Fortney. "It's just a matter of having the right political connections."

Frank J. Diekmann is editor of The Credit Union Journal. He can be reached at fdiekmann cujournal.com.

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