ARLINGTON, Va. - The National Association of Federal Credit Unions has decided not to extend membership to state-chartered, federally insured credit unions.

The association had flirted with the idea for more than a year, but the trade group's membership rejected it during its July annual meeting in San Diego.

The trade group's board formally decided to stick to its turf at its quarterly meeting Dec. 7.

Advocates of extending membership - who included association chairman David A. Miller - said the move would increase the group's membership and clout, particularly as its rival, the Credit Union National Association, was suffering internal upheavals.

But opponents won out by arguing that Nafcu would dilute its focus if it broadened its membership requirements.

"We have a priority to focus on federal credit unions," Mr. Miller said in a release. "Increasing federal credit union membership in Nafcu will remain one of the association's highest priorities."

At the same time, he said the group would create a line of products and services for state charters.

His group recently hired two membership representatives to help seek out new recruits.

Ronald L. Snellings, vice chairman of Nafcu and chief executive of Pentagon Federal Credit Union, had opposed allowing states to join. He said internal flaps at CUNA - such as whether to support a bill tightening federal supervision of federally insured state charters - illustrate the dangers of the big-tent approach.

"They can't do it," he said of CUNA, which Pentagon Federal quit earlier this year. "They can't represent both ends of the business without offending one-half or the other."

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