The Credit Union National Association won't appeal a court ruling that upholds a federal regulation severing management interlocks between industry trade groups and liquidity centers.
The industry's largest trade association announced its decision last Monday, one week after the U.S. District Court for the Eastern District of Virginia upheld a rule that, effective Jan. 1, 1996, will affect about half of the 41 corporate credit unions.
With its decision, the Madison, Wis.-based trade group hopes to cool the acrimony over corporate governance that has smoldered and flared between the industry and the National Credit Union Administration for the past 16 months.
"We look forward to putting this issue behind us and continuing to focus on the challenges facing the credit union movement - maintaining our unity and philosophy, meeting the financial needs of credit union members, and creating the systems and technology necessary to compete effectively in the 21st century," association president Ralph Swoboda said in a press release.
"We think their decision will be very helpful in putting this whole thing behind us," said Bob Loftus, director of public and congressional affairs for the agency.
The lawsuit was divisive within the trade group. Navy Federal Credit Union and Pentagon Federal Credit Union, the country's largest and third- largest credit unions, both quit the association over it, as did other institutions.
Although state credit union league leaders interviewed for this story believed in their cause - that the regulator should not be allowed to dictate the structure of corporate boards and management - they appreciated CUNA's attempt to mute hostilities with the regulator.
"I think the judge didn't look at the facts of the case," said Charles M. Whitney, president of the New York State Credit Union League, and, until recently, Empire Corporate Federal Credit Union. But "with the environment the way it is, I support the decision of CUNA not to do it."