The National Association of Federal Credit Unions has asked the industry's top regulator to fire its liaison with state agencies.

The Arlington, Va., trade group argued in a Dec. 7 letter that the National Credit Union Administration was sleeping with the enemy by keeping on its payroll a representative of the National Association of State Credit Union Supervisors, which has sued the agency.

The two-page letter charges that though the supervisory group and NCUA were once partners, they now are adversaries.

"While we do not, for a minute, question Nascus' right to challenge NCUA's rule in the courts, we do question the wisdom of continuing the practice of providing financial subsidies to Nascus in the form of employee salaries and rent-free office space," Ken Robinson, president of the National Association of Federal Credit Unions, said in the letter.

"To the extent that it is necessary to have an NCUA liaison with state credit union regulators, it would seem reasonable to have an NCUA employee perform that role," the letter said.

But a statement from Norman E. D'Amours, chairman of the National Credit Union Administration, indicated that for now, at least, the position is safe.

"We respect Nafcu's opinion in this matter," Mr. D'Amours said in a statement. "But we have a very good relationship with the state regulators, a relationship that is important to the safety and soundness of all credit unions. While we are always reviewing the NCUA budget, we have no immediate plans to make changes" to the disputed office.

The job is now held by Sena Sturgis, who is reported to earn $35,000 a year plus benefits.

The position was created about eight years ago to coordinate NCUA training of state examiners, said the state supervisory group's president, Douglas Duerr.

Of the 550 state credit union examiners, 500 receive training from the NCUA every year, Mr. Duerr said.

"It means that the National Credit Union Share Insurance Fund can rely upon the quality of the state examiners' reports," Mr. Duerr asserted.

Mr. Duerr said a National Credit Union Administration employee conceivably could handle the job, but he said he was upset by Mr. Robinson's insinuation that his group and the NCUA were adversaries.

He said the state supervisory group was perfectly within its rights to sue NCUA over a regulation that would sever shared management between trade groups and state-chartered corporate credit unions. The supervisors claim the rule tramples on states' rights.

"There's no question that we're in a lawsuit over a particular rule, but that's an appropriate role," Mr. Duerr said.

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