In the midst of an escalating war between creidt unions and banks, two officials of industry trade groupos met this week to air grievances and find common ground on issues.
David A. Miller, chairman of the National Association of Federal Credit Unions, the industry's No. 2 trade group, and Daniel R. Smith, president-elect of the American Bankers Association, met for 90 minutes Tuesday in Kalamazoo, Mich.
They laid the groundwork for a continuing dialogue.
The industries have been feuding over credit unions' tax-exempt status and the expansion of credit union charters to include more customers. Bankers in five states, aided by the bankers association, hjave sued over these expansions.
"Credit unions have been expanding their common bond lately, and they're startinvg to step on the toes of smaller banks in rural communuities," Mr. Smith said in an interview.
Even some credit unions have opposed expansion, said Mr. Smith, who is president of First of America Bank Corp., and hosted Mr. Miller in his office.
Mr Miller said credit unions are looking for new customers to survive when their sponsor, such as a military base or business, either closes or cuts back.
Mr. Miller, president of Kalamazoo District Bell Federal Credit Union, called the meeting because "it seemed like a unique opportunity to discuss issues." Both men live and work in Kalamazoo.
None of the controversial issues was resolved by the time the meeting ended. Both executives said it was more than anything else a get-acquainted session. Further talks may yield results, they said, but neither is promising anything.
The two will get together again in December, when Mr. Smith plans to meet with credit association officials in Washington.
"Neither of us had an agenda, and I don't think we had great expectations," Mr. Smith said. "We were getting started with a dialogue." He said the bankers association's policy toward credit unions is a "toucht situation."
"We do a lot of business with credit unions, and we're not anxious to offend them, he said. "A lot of big banks are going to be neutral on the subject because they do business with credit unions."
Finding Common Ground
Despite the problems, the executives said they found common ground over concerns such as regulatory burden and bankruptcy reform.
The talks between Mr. Miller and Mr. Smith follow on the heels of Credit Union National Association's declararion of war against banks. The credit unions' largest trade group is planning to go forward with the aggressive campaign laid out by its president, Ralph Swoboda, at its annual convention in Cincinnati.
Any way of stopping the conflict would be welcomed, said Charles O. Zuever, Credit Union National Association's director of governmental affairs. "If meeting with Mr. Smith will halt the lawsuits, so be it -- it's be great," he said.
