ARLINGTON, Va. - The National Association of State Credit Union Supervisors is working on a plan to separate the insurance and supervisory functions of the National Credit Union Administration.

The trade group, which represents both credit unions and regulators, has maintained since the early 1990s that the Credit Union Administration's tasks need to be split because it has used its role as insurer to regulate state-chartered, federally insured institutions.

Spurred by recent spats with the NCUA over such issues as corporate credit union regulation, the association voted on Sept. 18 to work on a plan of attack.

"We directed the government relations committee to work out an action plan, and that should be ready by March 1996," said trade association president Douglas F. Duerr.

Mr. Duerr said there were three possible approaches:

*Adding state regulators to the NCUA board to vote on issues affecting state-chartered federally insured credit unions.

*Keeping the current NCUA board structure but breaking up its agenda between supervisory and insurance functions.

*Pursuing legislation to split the agency.

Industry lobbyists have argued that splitting the insurance and regulatory functions of the agency could turn the NCUA into a "superregulator."

A Sept. 1 trade group report said that was inevitable, even without a division.

"With all the searching for more cost-effective government, the combining of the financial regulatory agencies is inevitable," the report said. "Therefore, give Congress what it wants and let them combine the regulatory functions."

The report added that combined regulators have worked fine at the state level.

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