WASHINGTON -- Credit union conversions to mutual savings banksare a threat to the entire credit union movement Congressman PaulKanjorski (D-Pa.) told attendees of NAFCU's CongressionalCaucus.

"If we don't correct what's going on out there, we're going tohave a major negative backlash..." the veteran lawmaker who serveson the Financial Services Committee warned. "I see raiding as athreat to the credit union movement."

One possible solution, he said, to help curb the potentialconflict of interest would be to move the members' capital toanother institution that would carry on the same type of work as iscurrently done with charities. However, Kanjorski said he wouldrather discourage conversions altogether.

Another option would be to tax the capital upon conversion, "butthat opens the door to taxation."

The lack of a minimum voting requirement to convert to a mutualsavings bank was the product of an H.R. 1151 compromise. CURIA, hesaid, would at least require 20% of the membership to vote, adding,"I actually think that's too low." However, the political realityis that is likely the highest level that could get throughCongress.

Kanjorski added that the underlying issue of fairness is a greatone to take to Capitol Hill. "Conversions are a great issue.Everyone can grasp it," he said. [email protected]