Credit Union Conference Opening Amid Controversy

The National Credit Union Administration kicks off a community development conference here today that has sparked a congressional inquiry and fueled resentment within the industry.

Despite the noncontroversial topic, NCUA Chairman Norman E. D'Amours is under fire for the way the three-day conference was organized.

The most serious charge, now being probed by the general oversight and investigations subcommittee of the House Banking Committee, is that agency officials instructed examiners to solicit contributions from credit unions to pay for the conference.

Subcommittee staff members have interviewed a number of credit union officers, none of them identified, who claimed their examiners pressed them for funds to help pay for "scholarships" that would let officials of small institutions attend the conference.

In an interview Thursday, Mr. D'Amours heatedly denied the allegations.

"It's classic McCarthyism," Mr. D'Amours said. "Everything is double or triple hearsay, with nothing to cross-examine."

He charged that the Republican-controlled Congress is investigating the matter to embarrass the White House. Mr. D'Amours is a Clinton appointee.

"I see this as largely a political inquiry," he said.

But Mr. D'Amours did concede that some examiners might have gone overboard in promoting the conference, which they were told to do after it was announced last year.

"I'm not saying that the allegations are absolutely beyond the realm of possibility," he said.

The regulator said that he had heard rumors of the solicitations earlier this year, but that internal investigations yielded nothing.

Karl Hoyle, NCUA executive director and Mr. D'Amours' right-hand man, disclosed the investigations in an April 30 memo to the agency's regional directors.

"There have been a small number of unsubstantiated and irresponsible charges that our examiners' attempts to help promote the conference to serve the underserved amount to improper coercion of the contributions," Mr. Hoyle said in the letter. "We know that these insidious charges are not accurate."

The memo also said examiners should encourage attendance but not ask for money. James J. Engel, the agency's ethics officer, said that though solicitations breached agency policy, promotion of the conference did not.

Long before the conference reached the attention of Congress, it created discord in the credit union industry.

Some officials questioned whether the agency has the authority to sponsor such a conference and, if so, whether it was a good use of agency funds.

NCUA documents put the conference's budget at $310,500, although some costs, such as travel expenses for agency officials, are being paid out of NCUA regional office budgets.

So far, just $46,709 of the conference budget has been spent, according to agency documents. Of that, the largest expenditure, $14,504, was for conference planner Cathy Clarke. The next largest, $11,328, was for printing costs.

The documents the NCUA provided did not break out promotion costs, but its "Serving the Underserved" conference has been heavily advertised.

Most of the conference budget will go to the still-untallied hotel expenses. Attendance is expected to be around 1,100; agency officials said they are pleased with that, although they were preparing for as many as 1,500.

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