WASHINGTON-CUNA President and CEO Dan Mica sent an e-mail to CUNA members reiterating its support of the private deposit insurance option and criticizing the Consumer Federation of America’s newly adopted policy statement -and NAFCU’s support-that all credit unions should have federal primary insurance. “Our position is based on CUNA policy that holds that state governments should have the right to permit and oversee the option of private share insurance, and that state-chartered credit unions in those states should have the right to choose a private option. Credit unions of all charter types have told us over and over again that the availability of a private share insurance option adds strength to the dual chartering system that benefits both federal and state chartered credit unions,” Mica wrote. (See page 3 story for latest at press time Credit Union Times’ Voting Poll results on private insurance issue). “I understand,” he continued, “that not all credit unions agree with this position. Nevertheless, it is unfortunate that NAFCU supported this issue before the CFA without first initiating a more complete discussion within the credit union movement. Credit unions presented a very divided movement to the CFA. I hope that does not serve as a model for how we approach Congress in the near future. We are evaluating what the implications of this new policy statement will be on Capitol Hill, but I know they won’t be good.” The Summit Federal Credit Union President and CEO Mike Vadala, a NAFCU Board member and a member of CUNA, stated, “NAFCU has been upfront in expressing concerns over private insurance for some time now, and this was a major policy decision that the NAFCU Board agonized over at length. We feel very strongly that federal share insurance is the best protection for consumers and America’s 82 million credit union members. There are many other important credit union issues where we agree with CUNA, and we look forward to working together on those issues for the benefit of the entire community.” NAFCU has said it supports the continuation of supplemental private insurance. However, American Share Insurance Vice President of Marketing Nick Damopoulos said, without primary private insurance, “There would be no ASI.” He added that he did not believe that private excess share insurance would survive without the continuation of private primary coverage. Damopoulos pointed out that at year-end 2002, ASI provided $10.7 billion in primary share insurance and just $3.7 billion in excess insurance through ASI’s Excess Share Insurance. But CUNA argued that the General Accounting Office study-which was supposed to be out this spring and has been delayed until possibly September-should be reviewed before decisions are made on the issue. Additionally, CUNA Vice President of Legislative Affairs and Senior Legislative Counsel Gary Kohn pointed out that a study of private insurance for both banks and credit unions is included in the deposit insurance reform legislation to be marked up after Credit Union Times went to press. In any event, Kohn said, “It’s been an internal credit union matter that hasn’t been fully vetted within the credit union system itself. So it’s been kind of a minority group that’s gone out there pushing their own agenda but it could have implications for the entire movement.” NAFCU President and CEO Fred Becker expressed a very different opinion. “It has been vetted. We met with CUNA last November/December at the Legislative and Regulatory Coordinating Council to discuss the issue then. I personally called Dan Mica the Friday before the GAC (CUNA’s Governmental Affairs Conference) and told him what our position was,” he explained. Becker added that the issue was also discussed during coordinating council meeting at GAC in February. Navy Federal Credit Union President and CEO Brian McDonnell actually introduced the amendment to change CFA’s policy position. Well beyond the inner-sanctum of the credit union community, lawmakers are beginning to get curious about the matter. “Recent publicity has had an unfortunate effect in calling legislators’ attention to this issue in kind of a negative way,” Kohn said. “We think that it’s been a mistake to make this a public issue. We aren’t aware of a specific amendment floating out there, but we are aware that some people have had discussions about that and we’re making it very clear to the Hill that we would strongly oppose any effort to eliminate [private] deposit insurance because we think its an integral part to the dual chartering system. The states should have the right to determine whether or not it’s appropriate for their credit unions always within the boundaries of safety and soundness, of course.” NAFCU has stated that it has no plans to attack the issue legislatively and that its lobbyists are not aware of any efforts to raise the issue during the deposit insurance mark up that occurred shortly after deadline last week. CUNA’s Renaissance Commission studied the issue just a couple of years ago. CUNA Chief Economist Bill Hampel told reporters, “When we did the Renaissance a couple of years ago and we were asking credit unions about this, this was an issue that often came up in discussions and focus groups and public hearings and the movement is not-as we’ve seen in recent events-all of one mind. But the vast majority of the credit unions we spoke to said that they think there is value in the option of private share insurance. We’re not saying there shouldn’t be public discussion within the credit union movement; there should be all sorts of discussion, but the credit union movement should try to come to a resolution on this before some sectors of it try to get other people to make the decision for us.” CUNA Associate General Counsel Mary Dunn stressed that CUNA would defend the private insurance choice “whenever it comes up.” [email protected]

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