ATLANTA - The National Credit Union Administration expects to be sued by Texas bankers for letting a Houston-area institution expand its customer base.

The agency got hold of a letter in which the Texas Bankers Association asked its members to help cover legal expenses, a top NCUA official said this week at me National Association of Federal Credit Unions conference here.

In February, the agency allowed Communicators Federal Credit Union to add retirees and senior citizens within a 25-mile radius of its customer base - a total of 578,145 people, according to NCUA documents.

That has Texas bankers hopping mad.

"Credit unions are out of control across Texas and TBA is stepping forward to challenge their unrestrained expansion," said the June 23 letter from association chairman J. Gordon Muir Jr. "The TBA Board of Directors has voted unanimously to authorize TBA and a number of co-plaintiff banks to file a lawsuit" against the agency over the expansion.

"While the target of our litigation will be NCUA arid its approval of the common bond expansion of a specific credit union, our real purpose is to challenge the legal authority of NCUA to approve these expansions across Texas and the remainder of the country," the letter said.

The association wants to raise $100,000, according to the letter.

Mr. Muir would not talk about the association's plans in an interview.

Bankers in North Carolina, Michigan, and Montana are pursuing similar lawsuits. NCUA general counsel Robert M. Fenner predicted at the NAFCU meeting that one of these suits will make it to the Supreme Court.

What Comes Next

Mr. Fenner predicted that credit unions will come out on top. But if bankers win, he said, one of two things will happen:

Either credit unions will seek to change the Federal Credit Union Act to make it easier to expand, or more credit unions will switch to community-based charters from occupational/associational charters.

The latter would be "a Pyrrhic victory for banks" because credit unions that serve whole communities would be tougher competition. "I don't know if bankers have adequately thought that through."

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A.C. Cowan, director of NAFCU's southeastern region, took pains to make sure the 1,300 credit union officials attending the conference didn't confuse him with the man who drove O.J. Simpson during the June 17 chase - A.C. Cowlings.

"I do not drive a white Bronco," he said at the trade group's annual meeting Monday. "I wasn't in L.A. on June 17, 1994."

He added that he had an alibi: his mother.

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NCUA Chairman Norman E. D'Amours wishes that Andrew Young were still in Congress.

Mr. Young, the former congressman from Georgia and mayor of Atlanta, praised credit unions as institutions that can bring the poor and minorities into the national economy.

Unlike Mr. Young, not everyone in Congress understands credit unions, Mr. D'Amours said.

"I'd like to bring him back to Washington and have him talk to Henry B. Gonzalez and Joseph Kennedy," he said.

Both representatives have said credit unions should comply with the Community Reinvestment Act, and House Banking Committee Chairman Gonzalez has launched an investigation of the industry that is expected to lead to hearings.

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The NCUA is still hammering out criteria for credit unions that want to apply for "distressed" status, but already Northeastern credit unions are asking how to qualify, said Layne Bumgardner, director of the regulator's northeastern region.

Under the agency's new field-of-membership policy, passed earlier this year, a credit union with a downsizing sponsor could apply for "distressed" status. Under the designation, a credit union could take in employee or association groups anywhere.

Mr. Bumgardner said two credit unions in the Northeast, which has been battered by military and corporate cutbacks, are seriously interested in getting the designation, but he would not disclose their names.

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Exhibitor giveaways are serious business at the convention. Not wanting to waste time writing their names on drawing tickets for televisions, clocks, and other goodies, some NAFCU conference attendees came armed with mailing labels and stamp pads.

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Credit union officials passed the hat to raise money for victims of the floods ravaging southern Georgia.

On Tuesday and Wednesday they raised about $21,000. Money from NAFCU and the Atlanta Marriott Marquis, where the conference was held, boosted the total to $24,800.

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