Zions Bancorp. announced plans to charter a Utah credit union in hopes of beating the competition at its own game.

"If Congress isn't going to deal with this unfairness in an equitable way by taxing credit unions, our intention is to level the playing field ourselves," said Harris H. Simmons, president and chief executive of the Salt Lake City-based company, in an interview.

"We can win either way."

While Mr. Simmons insisted Zions' application is legitimate, observers said Monday's announcement was purely symbolic.

"Zions is trying to make a statement, and saying, 'Well, if Congress isn't going to level the playing field, we're going to get a credit union,'" said Joseph K. Morford, an analyst with BT Alex. Brown in San Francisco. "But I don't believe it will really get that far."

Regardless, Beth Climo, the American Bankers Association's group director of financial industry affairs, said the notion of banks chartering credit unions "could be a very attractive way ... of making the fairly visual point that there are not limits to the common bond."

Mr. Simmons said Zions plans to organize a group of sponsors to file an application with Utah's Department of Financial Institutions as early as July. If the application is approved, the $9.5 billion-asset banking company would not technically own the credit union; rather, the new institution's members would consist of "certain qualified customers and other persons affiliated with the Zions organizations," he said.

Mr. Simmons said he hopes Zions' move will persuade lawmakers to re- think their support for pending legislation that would reverse the banking industry's hard-fought Supreme Court ruling requiring all credit union members to share a single common bond.

"The bill is a bad idea-credit unions have gotten out of the box they were originally intended to operate within," he said.

Credit union industry officials were nonplussed.

"If he (Mr. Simmons) wants to go ahead and work with an institution that is not-for-profit ... and is led by a board of volunteers that have to answer to common old depositors, God bless him," said Patrick Keefe, vice president of the National Association of Federal Credit Unions.

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