WASHINGTON and ARLINGTON, Va.-CUNA and NAFCU fight for their individual constituencies together and separately, but always with their members' interests in mind. CUNA and NAFCU have done battle together, and when they team up things happen. Without unity during the Campaign for Consumer Choice and H.R. 1151, no one can say what would have happened. The two groups still have several concerns for credit unions in common. Take credit union taxation as an example. Both groups are against the taxation of any credit union. When asked if taxation would be the end of credit unions, NAFCU President and CEO Fred Becker replied, "Credit unions as presently constructed, yes." CUNA Senior Vice President of Government Affairs John McKechnie said it would "signal a severe misunderstanding" by lawmakers of credit unions' structure. He added that taxation is an issue that cuts across all sizes and charter types. The "state battles have echoes here in Washington," he said, noting IRS' current focus on Unrelated Business Income Tax. While there is no bill currently pending in Washington, you have to look at the bigger picture, CUNA President and CEO Dan Mica explained. There is a $500 billion federal deficit and deficits as far as the economists' eyes can see; 48 of the 50 states are having the worst budget problems in their histories. "Add it all up and the environment would lead to `the perfect storm,' " he said. Becker predicted that once the economy really turns around and the states' budgets begin balancing themselves, attempts to tax state chartered credit unions should die down. Bankruptcy reform is another area where the two groups come together: it is a good thing. One thing the naysayers in the credit union community have to come to terms with is that no one person can write it and that compromises are necessary," Becker said. " The bill's been worked long and hard by both sides.We finally produced a bill that we can live with". According to Becker, "The means test could be tougher, yet," but "it's a significant step forward." Those in the credit union community who continue to complain about the bill will make others question it and that division aids the opposition, he argued. CUNA has also been an avid supporter of a unified voice in favor of bankruptcy reform. The two credit union trade associations have been working hard to allow credit unions to diversify their lending portfolios. This year, CUNA struck a deal with NewTek to facilitate credit union member business lending. Both groups worked with the Small Business Administration to expand credit union access to the government-backed loan programs. CUNA has also established an alliance with Freddie Mac for mortgage lending, while NAFCU set up a similar agreement with Fannie Mae. NAFCU Services Corp. also endorses Prime Alliance for mortgage processing and fulfillment. "Using those tools, even the smallest of the small credit unions, if they make the policy decision, are able to do this," NAFCU Senior Vice President and General Counsel Bill Donovan said. Both groups also recognize the challenges credit unions face with the prompt corrective action levels for capitalization. Both are studying ways to reform the PCA law and possibly adding secondary capital to credit unions' arsenal to achieve an appropriate level of capital. Several congressmen, including House Financial Services Committee Chairman Mike Oxley (R-Ohio), Ranking Member Barney Frank (D-Mass.), and committee members Bob Ney (R-Ohio) and Brad Sherman (D-Calif.), have caught wind of credit unions' plight and are raising the issue on Capitol Hill. Even with PCA reformed, a large number of credit unions still want alternative means for raising capital, CUNA and NAFCU acknowledged. "Long term, I don't think [secondary capital] can die down as an issue," Becker said. Continuing to expand service to the underserved and those of modest means is also a top priority for both CUNA and NAFCU. And when each group got to review the other's list of the top 10 issues facing credit unions, they agreed on many others, like increasing public awareness of credit unions and renewing the Fair Credit Reporting Act preemptions. With so many issues in common, one might wonder why there are two groups. However, the leaders of the two trades disagree strongly on a merger. "NAFCU does some very good things. CUNA does some very good things. Together, we could do great things," Mica, who is in favor of a blending of the two groups, said. CUNA does not have an official stance either way, but Mica has promised to make a merger with NAFCU a bigger issue closer to his retirement. He has said he will remain at CUNA for at least the next few years. Mica's reasoning is that a divided movement the size of the credit union community makes it more difficult to accomplish anything, and the rationale for maintaining two separate groups "is not based in reality." Becker completely disagreed. When asked about the pros and cons of a merger, he said, "I don't think there are any pros." He pointed to recent matters that have come up where Becker said NAFCU led the fight like the California credit card case and the reaffirmation language in the bankruptcy reform bill. Donovan added that in the early 90s, without NAFCU, credit unions would have had to begin writing down their 1% deposit into the National Credit Union Share Insurance Fund as "dollars and cents on the balance sheet." "It's time people start to recognize what members want," Becker said, pointing to NAFCU's membership satisfaction survey that found 84% of NAFCU-member CEOs said the overall value for dues paid was "outstanding" or "very good." He also said federal charters need a separate representative and that competition is good and keeps the professional staffs at both groups at the top of their game. CUNA's McKechnie argued that CUNA is stronger because of the differences between the charters that they represent. Anyone talking of a merger is "waving at windmills" like Don Quixote, Becker stated. [email protected]