State Trade Group Wins New Prestige with Fight Against D'Amato Bill

WASHINGTON - In the world of trade group politics, the National Association of State Credit Union Supervisors may have scored a coup in opposing legislation to strengthen the federal government's supervisory power over state institutions.

Sen. Alfonse M. D'Amato unveiled the bill in March. The Arlington, Va.- based trade group, which represents state credit unions as well as regulators, did not oppose it immediately. But when the group decided to do so, it trumpeted its displeasure loud and clear.

Meanwhile, the Credit Union National Association, the industry's largest trade group, had come out in favor of the bill. It reversed itself later, partly because of grass-roots resistance the state supervisors group had helped whip up.

Doug Duerr, president of the state group, doesn't gloat, at least not publicly. But on learning of CUNA's July 31 decision to reverse itself - word was leaked to him the same day - he sent a bulletin to his members.

"It appears that Nascus has been successful in turning CUNA around on the D'Amato bill," he proclaimed.

Industry lobbyists said the state group's stance could increase its credibility as a defender of dual chartering.

"He's certainly energized his organization," said one lobbyist. "One way to energize is through confrontation."

Indeed, some liken the situation to the time in 1991 when the National Associations of Federal Credit Unions opposed a Treasury Department plan to force institutions to write off the 1% of deposits they contribute to the federal insurance fund - a plan CUNA initially supported, then opposed.

The federal group's position won it a lot of respect from the industry. Mr. Duerr declined to comment on analogies, but said, "We certainly haven't seen opposition from state charters; we've certainly seen support."

But Mr. Duerr's diehard opposition to the D'Amato bill was not immediate. Indeed, when Senate Banking Committee Chairman D'Amato announced the bill, Mr. Duerr said its effect would be minimal. He said state institutions comply with most federal guidelines because of insurance requirements.

He defended his flip by saying he thought the bill would focus on state- chartered corporate credit unions - over which the federal government already has strong jurisdiction.

But in announcing the bill, Sen. D'Amato, R-N.Y., made it plain that tougher oversight was coming for all state-chartered institutions.

"Nobody had seen the actual legislation," Mr. Duerr said.

"Early on, (Mr. Duerr) treated it somewhat with indifference," said Ken Robinson, president of the federal group. "When he finally came on record, he maximized" the bill's impact.

A central argument that CUNA made for supporting the bill was that the federal government already had the powers the legislation contained, an argument Mr. Duerr called "nonsense."

Mr. Duerr said support from the industry's largest association will help kill the bill. But how far CUNA will go remains to be seen, because its lobbyists may be reluctant to blast a bill they formerly supported, one observer said.

"As I understand CUNA's policy decision, (the lobbyists') directive is to oppose the bill," Mr. Duerr said. "We all work for somebody."

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