WASHINGTON - Congress is threatening still more scrutiny of credit unions and their supervision, alarming both the federal regulator and industry trade groups.

Sen. Robert Bennett, R-Utah, a member of the Senate Banking Committee, late last month added to the regulatory relief bill an amendment directing the Treasury Department to study the National Credit Union Administration's supervisory practices and its oversight of the National Credit Union Share Insurance Fund.

The study also would require federal banking examiners to inspect the financial health of the 10 largest corporate credit unions.

A spokeswoman for Mr. Bennett said the collapse of Capital Corporate Federal Credit Union earlier this year spurred the study's request.

"In light of what happened with Cap Corp, this study is timely," said Mary Jane Collipriest, press secretary for Sen. Bennett.

Treasury would be given a year to conduct the study; it would report its findings to Congress along with any recommendations for legislation.

Bob Loftus, a spokesman for the National Credit Union Administration, said a study could undercut the agency.

"We think it is well intentioned, but we have some concerns," he said. "We are concerned because the Treasury Department would be involved in studying an independent agency. We intend to confer with Sen. Bennett."

The agency also is worried that a study could play into the hands of some bankers and credit union officials who want oversight of the insurance fund split off from the regulator, Mr. Loftus said.

For example, the National Association of State Credit Union Supervisors has endorsed divorcing the insurance fund from the NCUA. Also, Utah Bankers Association president Lawrence Alder said corporates and the credit union insurance fund were two issues his trade association had raised with the senator.

The National Association of Federal Credit Unions is upset at the prospect of banking examiners peeking into corporates.

"Examiners from the federal banking regulatory agencies ... will be required to judge the credit unions," association president Kenneth Robinson said in a statement. "Neither of these agencies, nor their employees, have any experience in examining or evaluating credit unions."

Association spokesman Patrick Keefe said the Arlington, Va., trade group will fight the corporate study.

"That's something we want to see removed as soon as possible," he declared.

Charles O. Zuver, director of governmental affairs for the Credit Union National Association, said he would prefer that a study not be done, but he said the trade association has no plans to try to block it.

"I think if and when it's completed, the credit union system will look pretty good," he said. "The first thing people ask you when you oppose a study is, 'What are you trying to cover up?' "

The amendment calls for Treasury, in consultation with the Federal Reserve, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency, to review credit union supervision.

A study also would explore whether the federal insurance fund could be administered by an entity other than the NCUA and how the capital contributions should be accounted for by credit unions. Credit unions put 1% of insured deposits in the fund but continue to book the money as an asset.

Finally, banking examiners would look into the investment practice, financial stability, and supervision of corporates.

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