COLORADO SPRINGS, Colo. - Credit unions are making headway infending off banker attacks, and provided they keep up their guard,the attack "crescendo" could lessen in a year and a half once theterm of an incoming American Bankers Association chairman - and CUnemesis - ends. That assessment was put forward here by Rick Craig,a veteran of Utah's bank-CU clash as president and CEO of thatstate's largest CU, the $2.6 billion America First FCU, ofRiverdale, Utah. Suggesting that CUs continue to bolster politicalaction programs at both the state and federal levels, Craig offeredwhat he said was a more optimistic view that the industry canwithstand the banker onslaught because the CU campaign is gainingpublic support. Witness to that, he said, are the favorablecomments earlier this month by U.S. Sen. Richard Shelby ( R-Ala.),chairman of the Senate Banking Committee, who said CUs should notbe taxed because such a step would hurt the public with membersending up paying taxes. In a weekend speech to the annual meetingof the Colorado Credit Union League here, the America First CEOargued that CUs have become "galvanized" in recent months to gohead-to-head with the banking lobby but that still more needs to bedone to ensure that CUs "are feared" rather than just "liked." Aspart of the galvanizing process, he said, the CU leadership hasstrengthened the political apparatus within state leagues - hiringpolitical veterans to senior posts - reinvigorating advocacygroups, meeting more frequently with lawmakers and sharpeninganti-bank media ads, contended Craig. Regarding League staffing, hepointed to the hiring three months ago in Colorado of a former topgubernatorial aide, John C. Dill, to head the Colorado League andin his own state, where the former executive director of the UtahRepublican Party now is CEO of that League. Despite this progress,the Utah CU leader warned the industry is in for continued roughtreatment from elements within the ABA led by a Utahan HarrisSimmons, chairman of Zions Bank of Salt Lake City and the incomingchairman-elect of the ABA. In a speech last December before a CUESconference in Las Vegas with comments repeated here, Craigsuggested the ABA's CU attack agenda on taxes and field ofmembership was orchestrated by Simmons whose term would continueinto 2005 but after that there are hopeful signs the anti-CUcampaign could lose some of its steam. Craig has argued thatSimmons maintains a vendetta against CUs in his state, but thecampaign has already backfired with some Utah lawmakers lamentingtheir mistakes in enacting last year a harsh anti-CU bill whichnearly imposed a first-time tax on large Utah CUs. The prospect ofa tax triggered a flight of some 11 Utah CUs - including some ofthe state's largest - to convert to a federal charter, consequentlydepriving Utah of needed revenue. Though the tax portion waseliminated, the Utah legislature did impose a ban on businesslending for large institutions and severely restricted businessloans for others. Once there is a "culmination" to Simmons term atits end in 2005-2006, CUs "will be much better off," Craigpredicted in an interview. In his formal remarks to the ColoradoLeague convention, Craig warned CU executives that "sooner or lateryou will be involved" in bank attacks. Colorado so far has beenspared any major skirmishes with bankers unlike neighboring Utah orNew Mexico. The Utah CEO urged Colorado CUs to get make sure theirpolitical-funding apparatus is in good shape to fight bankerattacks because "don't think for a minute right will prevail." Hesaid CUs need to make sure a sound legislative strategy isdeveloped "so that we have friends and key people on the side ofcredit unions." As he did in his CUES speech in Las Vegas, Craigwarned that the banking lobby is working hard at a divide andconquer strategy of splitting big CUs from smaller ones and thatstrategy must not prevail requiring the industry become united.Even though the Utah Bankers Association lost its bid in 2003 toimpose a tax on CUs, "they won't rest" in his home state as well aselsewhere, he concluded. -

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