The credit union community prides itself on giving members andmost members of Congress warm and fuzzy feelings. It is more of acommunity than most industries with credit unions sharing bestpractices and how-tos. Being part of a cooperative movement yetcompeting in a tight marketplace puts credit unions and relatedorganizations in a tough spot.

Again, a subculture of the community "inside the Beltway" is theregulatory one. The financial services regulators necessarily haveto work together on issues such as mortgage regulation and ITsecurity measures for their respective industries. This cooperationhas been formalized by the Federal Financial InstitutionsExamination Council.

Like any community, an undercurrent to this togetherness is thepolitics. As former Speaker of the House Tip O'Neill (D-Mass.)said, "All politics is local."

For instance, NCUA has taken some hits lately. The Office ofThrift Supervision regularly targets the agency on the Hill andotherwise, taking swipes at NCUA's exercise of its regulatoryoversight. No doubt this is for a couple of reasons: 1) NCUA's grabto supervise any part of mutual savings banks conversions that itcan and feels it should and 2) divert attention from its own hugeproblems (that go by the name of Indy Mac and probably more tocome). OTS is currently in a public shouting match with Sen.Charles Schumer (D-N.Y.).

NCUA just this last week was called "arbitrary and capricious"for the second time in recent memory. That judgment against theNCUA in the case of Members 1st Federal Credit Union inPennsylvania, et al. really stings for a regulator. At the time theagency was looking to expand credit union field of membershippowers to the very edges of the statutory lines; apparently, thejudge felt the agency crossed those boundaries, ignoring too muchpertinent information that went against the community charterapproval.

The banks now have had three legal victories over the agency inthe last few years between this most recent ruling, the mutualsavings bank fiasco in Texas and the underserved areas approval andrepeal in Utah. While I certainly feel the Treasury Blueprint is100% wrong in combining all the financial services regulatoryagencies, OTS and these recent decisions against NCUA aren'thelping to make the argument against it.

The decision was also a boost to the ego of the American BankersAssociation, which filed the lawsuit. Expect more to come from themevery chance they get. The already rabidly anti-credit unionPennsylvania bankers in particular will be more vociferous aswell.

This at a time when the credit unions and banks really need topull together for the common good. Credit unions should be pickingup members and mortgage market share in the aftermath of the banks'missteps and taking full advantage. However, a systemic crash ofthe for-profit banking system would not be good for anyone, a pointCUNA President/CEO Dan Mica made at America's Credit UnionConference.

Yet even the credit union trades are intent on bickering amongthemselves and one-upsmanship, none of which is constructive forthe future of credit unions. Everyone wants and deserves credit fortheir work and accomplishments. Pride in one's work is part of whatmakes it perpetually better, and competition is another factor. Butbragging rights--or knocking others' efforts that are basicallyaligned with yours--should be balanced with the larger good. Inthis instance, that's the future of the entire credit unioncommunity.

For those credit unions that belong to both CUNA and NAFCU,think about it. You're putting funds into one to beat up on theother. Though this is certainly not either association's primarypurpose or major focus of their work, it seems to be a growingpastime, and it goes both ways.

Both groups have many strong points and membership in both isadvisable to those credit unions that see value in both. But, thedual-membership credit unions, and even some of those that onlybelong to one or the other, need to knock some heads together. CUNAand NAFCU must work together and coordinate as much as possiblewhere there aren't substantive differences between federal andstate charter interests. Otherwise, everyone's wasting time andmoney duplicating efforts as well as fighting each other.

In this environment, how are credit unions and banks supposed tomake nice to effectively work on common goals, such as fightinglegislation that would limit interchange income or curb certainpredatory practices to just the right degree so as not to interruptlegitimate and responsible banking business?

Each of these legislative and regulatory concerns is the trades'primary job, with credit unions' lobbying assistance, butultimately, they impact the way each and every credit union isrun.

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