AUSTIN, Tex. - It's becoming customary for credit union officials to gripe about their regulator when they gather, but it's still unusual for a regulator to complain about his own agency.

That's what Robert Swan, a director of the National Credit Union Administration, did this month when the Texas Credit Union League held its annual convention here.

Among Mr. Swan's targets were the NCUA's new rating system and its investigation of Southwest Corporate Federal Credit Union.

Mr. Swan, himself a former credit union manager, criticized the agency's new Camel rating system for including a section for service to members.

"The new Camel section gives examiners too much leeway in decision- making," Mr. Swan said. He then told the 1,500 credit union officials attending the meeting to complain to the agency if they felt the new system wasn't working.

Mr. Swan also took shots at the agency's extensive investigation into Dallas-based Southwest Corporate. The probe was triggered by the corporate's acquisition of the Texas league's check processing facility. Some charged that the deal wasn't an arm's-length transaction because both institutions share management.

"I don't feel like there's a hell of a lot to it and I don't think you should be concerned," he said.

The agency has used the example of Southwest Corporate to justify the rule it approved last year to split shared management between corporates and trade groups, a rule Mr. Swan opposed.

The Credit Union National Association has sued the agency over the rule, something that has caused a handful of credit unions to cancel their membership.

Mr. Swan lamented this trend.

"People who jump to that extreme are not valuing the trade association relationship," he said.

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By gaining approval for what amounts to a 100% dues increase over the next three years, newly appointed Texas league president Richard Ensweiler racked up his first major victory.

The increase raised some grumbles at the conference, but the level of discontent didn't compare to the poisoned atmosphere of last year's meeting over a controversial plan to slash the league's board size and sell its check-processing facility to Southwest Corporate.

Mr. Ensweiler said in an interview that the money from the dues increase will be used to improve the trade group's member services.

"Only thing a lot of credit unions think we provide is lobbying," he said. "But we offer compliance services and other services they're not taking advantage of."

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John Ruffin, director of NCUA's Western region, told the conference that the aborted merger of Patelco Credit Union and First Technology Federal Credit Union on the West Coast has spurred scrutiny of all merger applications.

The agency, he said, wants to ensure that mergers are in the best interest of the members, not the management.

"We've seen instances where the bigger credit union offers to employ, at a higher salary, the manager of a smaller credit union if he can persuade his board to merge," he said.

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