By now all interested parties have had ample opportunity toexpress their views on the 183-page report on the financialcondition of the U.S. credit union industry which was issued latelast year by the U.S. General Accounting Office. As expected, amongthe first to weigh in with a detailed written interpretation ofwhat the so-called GAO Report means was NCUA. That was to beexpected since a great deal of the report was actually devoted toNCUA and NCUSIF matters. NCUA's response via its Chairman DennisDollar was a public relations masterpiece. It contained equal partsof "appreciate your hard work and recommendations" with carefullyworded "we'll get back to you" statements. Well thought outinterpretative responses were also predictably received immediatelyfrom various credit union trade groups, separately andcollectively. They were all very thorough and diplomatic, but alsovery firm. To almost no one's surprise, lobbyists working for thenational (and one state, Utah of course) banking trade associationsfelt compelled to put in their whining two-cents worth. With acouple of important exceptions, credit union representatives triedto put a positive spin on the report. The bankers interpreted it asstill another opportunity to bring up every tired anti-credit unionargument they have run up the flag pole in the past. In the view ofthe banking industry the report agreed with its decades-old claimsthat credit unions are getting too big. That CUs were meant to onlyserve those of small means. That NCUA is a "cheerleader" and a"wayward" regulator. That the time for credit unions masqueradingas banks to be taxed and included under the Community ReinvestmentAct (CRA) is long overdue. Bankers even went a step further. Inaddition to twisting the report's observations and recommendationsto suit their same old arguments, they next criticized credit unionrepresentatives, but especially NCUA Chairman Dennis Dollar, forwhat he had to say about the report's contents. They wereespecially critical of his many positive statements regarding howcredit unions have stepped up to the plate in the past 18 months totake in large chunks of turf where millions of low income personsresided who were now eligible for credit union membership. Based onwhat everyone has had to say about the report and reading betweenthe lines, it basically boils down to still another costlygovernment exercise to produce a hefty document to appease a coupleof politicians before seeking its rightful place on a shelfsomewhere in the bureaucracy to begin gathering dust. Have I readit word for word? No, but based on everything pro and con that hasbeen said about it, and numerous news reports in this publicationand those of the trades, it would appear that the long-awaitedreport contains nothing credit union folks (and the bankers) didn'talready know. Even just looking at its specific recommendations, itappears that the report has little likelihood of changing anythingof significance in the short term. The last GAO report on creditunions was done in 1991. It, too, was a big yawn. NCUA and thecredit union trade groups should be complimented for the way theyresponded to the report. They did so thoroughly with apoint-by-point analysis. And they did so in a tone and manner thatwas respectful and wording that was politically correct. Specialkudos to the CEOs of CUNA, NAFCU, and NASCUS for presenting aunited credit union front and issuing a joint letter in which theynoted the many positive aspects of the report while expressingserious concern over several of its flaws as they identified them.Such as the report's misinterpretation of the Federal Credit UnionAct regarding the formation of new credit unions. And the misuse ofHome Mortgage Disclosure Act data to assess how the credit unionindustry is responding to the mortgage needs of low-income persons.Much of what was included in the joint letter bears repeating. Forexample, the letter said that the study made uncalled for andirrelevant comparisons between banks and credit unions. "We areconcerned that credit unions not be viewed by the GAO, Congress, orothers who read this report through a lens provided by the AmericanBankers Association." In a separate statement, CUNA President andCEO Dan Mica made the point even stronger when he said: ".we knowof no instance where the GAO has contacted CUNA or credit unions inconnection with any study of the banking industry." Right, andit'll never happen either. Now that the dust has settled and therhetoric on both sides has cooled a bit, it seems to me thatoverall credit unions came off looking very good in the report. Thegrowth and health of the industry were duly noted in several keyareas. An industry that is safe and sound was acknowledged. Therewere no "we-can't-live-with-this" recommendations for credit unionsto deal with. The door was left open on even the most controversialissues such as expanded membership, capital adequacy, therelationship between NCUA and NCUSIF, and on how credit unions havechosen to do business. In summary, the latest GAO Report paintedcredit unions as a whole in a very good light. In fact, it seemedat times report writers struggled to find anything even worthy of aslight tap on the wrists of the CU industry. To me, the biggestnegative was the fact that the report gave banking lobbyists stillanother platform from which to spew their hateful venom against anindustry that has done so much to help the very people banks havelittle or no interest in serving. On the other hand if the reporthad come right out and said that credit unions were like motherhoodand apple pie, banking lobbyists would probably have shot back thatcredit unions need to realize that cherry pie is more patriotic andbrings in more tax dollars. Comments? Call 1-800-345-9936, Ext. 15,or Fax 561-683-8514, or E-mail [email protected].

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