The first issue of Credit Union Times in a brand new year can only mean one thing: it is time for me to once again make predictions on what I expect to unfold in the world of credit unions over the next 12 months. So here goes: After years of frustration at coming close but no cigar, a bankruptcy proposal acceptable to both CUNA and NAFCU will pass relatively easy considering the measure’s past track record. No sooner will it pass than a wide range of groups will cry foul. UBIT (Unrelated Business Income Tax) will emerge from the shadows, command a lot of attention and credit union resources, and then quietly fall off the radar screen as it did in 2004. Although the IRS traditionally shakes things up, they also move slowly on issues they have trouble getting their arms around. However, more states will be drawn into the fray before it again goes into hibernation. The open seat on the three-person NCUA Board will remain vacant till at least the second quarter of the year, possibly even the third quarter. It will be filled by a male who at this point is completely unknown in the credit union industry. He will need a fast track education in all things credit union. (So what’s new?) Directly related, current NCUA Board Member Debbie Matz, a Democrat now sans backer Tom Daschle, who lost his re-election bid in South Dakota, will stay on the board beyond the August expiration of her term. A one-person board makes no sense to anyone. Matz’s board position will be filled by President Bush about the same time he fills the open Republican slot and reaffirms JoAnn Johnson’s continuation as chairman of the at long last full-strength board. 2005 will be the first year in recent memory that any further attempts to convert credit unions to bank charters will not succeed. I will go out on the limb even further and predict that no credit unions of any size will even attempt to pull off a bank charter conversion. If I’m wrong and they do, the Columbia Credit Union and the Lake Michigan Credit Union fiascos will be dusted off as reminders of what can go wrong. This next one is easy: the CUNA Mutual Group will finally agree to terms with its seriously unhappy union membership. Neither side will be happy with the details. Bad feelings will continue at least for the foreseeable future. Meanwhile, just as the search for a new CEO to replace deposed Mike Kitchen seems to be getting nowhere, an announcement will be made. Kitchen’s successor will be a most unlikely choice and will be followed by a board-mandated senior staff shake-up. Kitchen himself will resurface on the fringes of the credit union industry in a position that will prove to be a good fit for him. CURIA will hit the ground running by re-gathering the tremendous congressional support it enjoyed last year and then some. A number of changes will anger the bankers, please the politicians, benefit credit unions, and help CURIA come within an eyelash of passing. But it won’t, due to some old fashioned last minute political maneuvering. A side benefit of the CURIA battle will be a significant increase in credit union industry media exposure and a heightened regard for CU leadership. Another is that CUNA and NAFCU will have found a number of ways to work more closely together. The current controversy once again swirling about the Polish and Slavic Credit Union will reach a boiling point early in the year and get downright nasty. As charges and counter charges intensify, eventually the real reason behind the turmoil will surface. Keep an eye on the CU’s investments and how they are handled. As it did before, NCUA will play a pivotal role in deciding the credit union’s future direction, its board makeup, and its management staff, but not before the CU white hat gets seriously smudged. Check 21 will be much in the news throughout the year. Getting all the credit union ducks in a row will be a pain, but no major problems will surface. In fact, implementation will generate kudos for credit unions. Banker attacks, especially at the state level, will be even more frequent and a lot nastier throughout the year, a strategy that will generate some unwanted and unexpected consequences for banking industry lobbyists. Credit unions will retain the always attacked tax-exemption and FOMs will continue to expand in big chunks of turf. Many more credit unions will become community charters and change their names. CEOs of three leagues, two corporates, eight credit unions, and the Utah Bankers Association will “resign.” Also, MBLs will experience rapid growth as will CU CUSO trust services. The hubbub over overdraft programs will fade away as the most successful firms undergo an image facelift. The sale of CU credit card portfolios, large and small, will continue to make news. The industry will undergo a building boom with bigger and better headquarters facilities and more and more brick and motor branches. TIP charters will be embraced by a number of credit unions that will equal the number of TIPs already in place. As for the big picture, assets will skyrocket, but come predominantly from the top tier credit unions. Early in the year, all 100 of the largest CUs will be over one billion in assets. Led by the California/Nevada advertising initiative, overall credit union marketing will take a giant step forward in sophistication and effectiveness. Credit union public relations efforts will continue to be minor league. Membership numbers will improve, but still fall far short of expectations. A final slam dunk prediction close to home: Credit Union Times will once again be the first credit union publication to break every major industry news story and then cover every one of them comprehensively. As always, I’ll let you know in the last issue of 2005 just how well my crystal ball functioned during the year.