For the second straight year, the Credit Union National Association feels backed into a corner during its annual convention.

Last year bankers were filing lawsuits against expanding credit unions and CUNA launched a public relations counterattack. This year the federal regulator wants to restrict interlocks between corporate credit unions and trade groups, and the industr9's largest association has set aside $150,000 to finance a lawsuit.

But while the industry was united for the last battle, this time it is fractured as some credit unions think it is time to end the cozy relationship between corporates and trade groups.

CUNA, however, is unequivocal?

"It's an attack on the integrity of all credit union people," CUNA president Ralph Swoboda said in a statement. "Credit union volunteers should feel personally offended. Volunteers for any credit union association, from a national managers' group to a local marketers' network, would be wrongly disqualified from serving on a corporate board."

Still, Mr. Swoboda announced Thursday that he will step down as chief executive of U.S. Central, which as the lead corporate is the industry's main liquidity facility.

Mr. Swoboda has headed CUNA and U.S. Central since 1986. He plans to continue as a U.S. Central director. U.S. Central president James R. Bell will report exclusively and directly to the institution's board and no longer will be a CUNA officer.

Also, the board of U.S. Central voted to reduce its interlooks with CUNA and canceled a management arrangement with the trade group worth $782,000.

National Credit Union Administration Chairman Norman E. D'Amours said CUNA's opposition to ending management interlocks is the minority opinion in the industry.

"I feel rather strongly that the majority sentiment of the credit union movement is favorable to this agency's attempt to remove interlocks from the corporate system," Mr. D'Amours said in an interview.

He said his view is backed up by initial returns to an agency request for comment on the issue and conversations with credit union officials. Indicating a split within the group, Mr. D'Amours added, "some people in the higher echelons of the CUNA organization" favor the agency's bid to restrict interlooks.

Both men will be speaking Oct. 9, the kickoff day for the CUNA annual convention in Kansas City, which runs through Oct. 11. There's a chance sparks will fly over the issue them.

Also likely to generate conversy within the industry is the final report by the CUNA Field of Membership Task Force, which will be released Oct. 10. The report endorses letting more than one credit union serve a certain membership base.

This is a sore point with many small credit unions, which argue it gives larger institutions an unfair advantage.

John Gregoire, CUNA executive vice president of association services, defended the report and said credit unions shouldn't be so protective of their turf.

"From the standpoint of the consumer, overlaps are probably a positive," Mr. Gregoire said. "It shouldn't be a divisive issue."

In the case of corporate interlocks, both CUNA and NCUA claim their position is supported by letters the agency received in response to a request for comment earlier this year.

The agency received 400 comment letters; 278 of them opposed the agendy's proposal to ban shared management.

But, agency officials said, many of those letters were from states in which interlooks exist. The letters seem to have been inspired by leagues after early reports said most letters favored restricting shared management.

Removing those letters brings total responses down to 109, with 69% of them backing the agency, officials said,

Charles O. Zuver, CUNA director of governmental affairs, disputed the regulator's claim and criticized the way NCUA tallied the comment letters.

"It's hard to believe they can adopt that stance," he said. "Even after subtracting the comments from leagues and corporates, more than 70% of credit unions submitting comment letters to NCUA opposed the agency's position. This seems like an unambiguous result."

Mr. Zuver also chided Mr. D'Amours for telling House Banking Committee Chairman Henry B. Gonzalez that most of the industry supported his position.

"When Chairman D'Amours told the House Banking Committee 'the majority of credit union leaders support our goals,' who was he referring to and how does he know that?" the statement said.

Regardless, last week Rep. Gonzalez -- who has criticized interlocks and earlier this year threatened legislation if things weren't changed -- praised Mr. D'Amours for moving decisively.

The agency also has the support of the National Association of Federal Credit Unions.

The proposal the agency issued Sept. 16 would ban officials with a credit umon organization from holding a majority of seats on a corporate board, or the chair position. It also would prohibit a corporate from employing trade group employees.

On Sept. 23 the CUNA executive committee voted to sue the agency if it issued a final rule "substantially similar" to the proposal. That vote was contingent on an Oct. 6 vote by the trade group's full board. The vote was held too late for this edition, but CUNA officials said they expected the executive committee's decision would be approved.

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