FORT WORTH, Texas – Texas credit unions are all too aware ofjust how close they came earlier this year to being taxed. But somemay not know that the defeat of the initiative was partly due tothe efforts of an unusual lobby group that runs alongside, butindependent of, the Texas Credit Union League – the Credit UnionLegislative Coalition. The coalition represents 19 credit unions, alaw firm, an accounting firm, three companies specializing inlending forms and software, and an insurance company. It's gettingcredit for a few other changes, including the right to charge latefees on indirect loans and a wholesale rewrite of the state'scredit-union laws in 2003. It won a substantial pay hike for TexasCredit Union Commissioner Harold Feeney during the 2005 session.But the coalition's better known for an awareness and effectivenesscampaign and what didn't make the law books. “We built ourrelationship with the (legislative staff) and we educated them onthe differences,” Melodie Stegall said. In 2003, Stegall becameCULC's executive director – and its only fulltime employee – afterserving as chief staffer for veteran former House AppropriationsChairman Robert Junell. The campaign ran from September to March asthe debate over school funding began to boil over. “People see thecredit union on the corner, etc., but they don't really understandthe differences between banks and credit unions,” she said. “Wewere educating legislators and staffers one-on-one, very simply. Ithink that went a long way for this session.” When Texas lawmakersbegan last session's mad scramble for new taxes to shore up schoolfunding, the state's bankers were quick to suggest one miraclecure. In a letter to House Speaker Tom Craddick, the powerful TexasBankers Association proposed taxing the state's more than 637nonprofit credit unions and ending a years-long standoff among someof Texas' financial power houses. Following two failed specialsessions and a firestorm of vitriolic finger-pointing that hasspilled into the 2006 governor's race, lawmakers went home and thefight over Texas' embattled “Robin Hood” method of financingschools went back to the courts. When the smoke cleared, none ofthe carcasses among lawmaker's funding proposals contained taxlanguage for credit unions. That threat could return if Gov. RickPerry summons lawmakers to Austin for a third try. For now, Stegalland the executives of some of the state's largest credit unions saythe Credit Union Legislative Coalition and the awareness andeffectiveness campaign it launched in 2004 are a part of the reasonthey're tax free. CULC has hired three of the state's better-knownlobbyists. Stegall came on board when the Texas Bankers Associationwas launching “Operation Credit Unions.” Warning that 32% of thestate's credit unions were making business loans, TBA created atask force, formed a special political action committee, and vowedto “aggressively wage war against the `morphed' credit unions ofTexas.” Taxation skirmishes with bankers are plaguing credit unionsnationwide. But Texas executives say the difference is that theCoalition is on the front lines and operating beyond the scope ofthe state association, the 614-member Texas Credit Union League.“It's something that sprung up much to our surprise,” said RichardEnsweiler, CUNA chairman and TCUL's president and CEO. “We workalongside them, but I'm the wrong one to ask about that. They'vegot their own reasons to be.” TCUL operates out of Farmers Branch,a bustling business center abutting Dallas on the glitzy east sideof what North Texans have dubbed the “Metroplex.” The coalition wasborn on the western side of the Metroplex in the boardroom of EECUin Fort Worth – which still calls itself “Cowtown.” Robert Rogers,EECU's president and CEO, said the state's largest credit unionshad specific issues that the league was too broad and diverse toaddress. “We're not here to bash the league,” he said. “We havedifferences of opinions at times, but we're not at cross purposes.”Unlike the league, Rogers says, the coalition has a “laser-likedirection.” He contends that individuals in the coalition routinelycontribute more to TCUL PAC than their non-coalition counterparts.Buddy Schroeder, an Austin credit union executive and formercoalition chair says the late-fee imitative wasn't of interestleague members too small to offer the programs with the coalitionfirst make its legislative mark in 2001. There are otherdifferences. Ensweiler has stepped into the fray over conversionsto mutual savings banks with a call from the Texas Credit UnionDepartment to revise its rules to require more extensivedisclosure. The two major credit unions whose pending conversionshave attracted national attention and controversy are Metroplexbased. By contrast, CULC has stayed out of the debate. CommunityCredit Union, of Plano, and Omni American Credit Union, of FortWorth, are two of the coalition's larger members. Neither renewedtheir membership for 2005 “Dick can't win on that. He's got peopleon both sides of the issue,” Rogers said. “If a credit union wantsto do it, we may object to it. But it's not what we were formed todeal with.” Hal Thomas, the coalition's current chair, callsconversions a matter of free choice. “Two of our member creditunions are converting, but it hasn't been a split position,” hesaid. “In my tenure, I haven't seen an issue that has split us. Werecognize that from time to time the larger credit unions mighthave different needs.” Stegall and Thomas weighed in during the2005 session and sided with the banks in helping draft the state'sfirst identity-theft law. The coalition also played a role inpassing the state's new financial literacy law. Thomas says theneed for the coalition to police new tax bills is heightenedbecause Texans don't yet pay a state income tax. That was rejectedby the 2005 Legislature along with a spate of new gamblingproposals. “Bankers will always be a threat,” Stegall said. “We hadto be proactive.” Although the coalition remains unusual amongcredit-union lobbies, she said, individual credit unions arestarting to hire their own lobbyists. “You never know what's comingdown the pike,” Thomas said. [email protected]