WASHINGTON - Sen. Phil Gramm has introduced a bill that would expand the National Credit Union Administration board to five members from three.
The measure, known as the State Credit Union Representation Act, would place another at-large director and a state regulator on the agency's board.
Before introducing the bill April 7, the Texas Republican had been the object of a lobbying blitz by the Credit Union National Association. He is the second-ranking Republican on the Senate Banking Committee.
"In the interest of states' rights and dual chartering it's a good idea to provide for more state-chartered input at the NCUA board," said Jeanne- Marie Murphy, a lobbyist for the CUNA.
Besides giving federally insured state-chartered institutions a voice in shaping agency policy, the trade group wants to check the power of NCUA Chairman Norman E. D'Amours, sources said.
Ms. Murphy declined to comment on whether the trade group is seeking to curb Mr. D'Amours' influence, but said "expanding the board allows for broader representation."
The chairman has raised the ire of the industry's most powerful trade group with a series of actions in his first year-and-a-half in office, including a regulation that eliminates shared management between the association and industry liquidity centers.
But the legislation's odds are hurt by the full plate of issues before Congress and the fact that Sen. Gramm might be too busy pursuing his presidential ambitions to push for enactment. The bill's only chance for passage would be as an amendment to regulatory rollback legislation, sources said.
The bill also faces opposition from the NCUA and the National Association of Federal Credit Unions.
In an interview, Mr. D'Amours said permitting a state regulator to serve on the board would blur issues of responsibility, because share insurance is backed by the federal government, not the states.
Further, he suggested that some state regulators are in the pocket of the industry, although he would not say which ones.
In introducing the bill, Sen. Gramm ignored a plea from the federal credit union association, CUNA's rival trade group, to wait until after Easter recess.
"Because of the broad range of issues that could be raised by your proposal, and realizing that such a proposal could prove controversial within the credit union community, (the National Association of Federal Credit Unions) respectfully requests that you defer introduction of this legislation until after the Easter recess," lobbyist William J. Donovan said in an April 7 letter to the senator.
Mr. Donovan's group believes that tampering with the agency's internal organization could open the door to more sweeping changes, such as consolidation with another regulator.
"If they start monkeying around with the structure of the board it could lead to restructuring of the NCUA," said Pat Keefe, a spokesman for the group.
Under the bill, a state regulator would be appointed for a two-year NCUA term, for which he would receive no reimbursement beyond travel expenses. The other new director would serve a six-year term, as do current directors.
No more than three directors could belong to the same political party.