A "strike force" is trying to stem a rising tide of negative publicity that has swamped the industry this year after the unprecedented failure of a corporate credit union.
The National Alliance of Credit Unions, formed last spring, made its first public statements last week, defining its vision for a secure credit union system.
"We formed this alliance because we needed some way to tell the world that we are safe," said Richard M. Johnson, president and chief executive of Wescorp Federal Credit Union in San Dimas, Calif. "That's why we're here."
More than 200 credit unions and about 20 of the country's 39 corporate credit unions have signed on with the alliance, the group said at a press conference at the National Press Club in Washington.
The group presented three principles for proposed changes in regulations: increasing capitalization, strengthening the industry's asset/liability management practices, and preventing investment in "exotic" instruments.
The proposals are intended to serve as a framework for further regulatory reform in the coming months, the group said. The alliance has hired about a dozen consultants and has spent "in the neighborhood" of $250,000 to get its message out, Mr. Johnson acknowledged.
The failure of Capital Corporate Federal Credit Union last winter set off a flurry of activity from regulators and legislators, with some warning that the collapse could foreshadow a crisis similar to the savings and loan debacle.
"We were absolutely shocked last spring, after the liquidation of Capital Corp., that the perception came out of Washington that credit unions must be in trouble," said Robert Brain, president of Telephone Employees Credit Union and a co-chairman of the alliance. "We suddenly realized our failure to do our job in making people understand how soundly they're operating."