SALT LAKE CITY – Now that a petition to Congress to intercede in the bank/credit union tax battle is up before the state legislature this week, just where do Utah’s two U.S. senators – as well as other members of the congressional delegation – come down on NCUA’s regulation of CUs. For one, U.S. Sen. Orrin Hatch, “is a straight-shooter who wants to play fair to both sides coming right down the middle,” professed Steven Christensen, chairman of the Utah League of Credit Unions. But some CEOs admitted having a few raised eyebrows this week after the Utah Republican was quoted in a featured Deseret News article suggesting while CUs had grown and evolved “we should certainly re-examine the rules to make sure they still fit today’s market.” Hatch, insisted Christensen, “is a great supporter of credit unions” and was simply acknowledging changing trends “as he tries to be helpful to both sides, so I think you can read his comments both ways.” Hatch told a reporter for the Salt Lake paper that his main concern is that banks, CUs “and their customers be treated fairly,” adding that he is a member of a CU “and I also do quite a lot of business with banks. I understand both sides of this issue.” A Washington spokesman for Hatch confirmed the Deseret News remarks noting the former member of the Senate Banking Committee and now head of Judiciary had no comment on the actual anti-CU resolution expected to be introduced in the Utah House shortly. The resolution being spearheaded by majority whip Rep. Jeff Alexander, author of a 2003 law which tried to tax Utah CUs, asks Congress to allow states, like Utah, to tax both federal and state CUs and to take “appropriate action” regarding NCUA regulation of CUs. Alexander, a Provo Republican, insists the legislature needs “direction and feedback” from Congress on CU regulation but the Utah League counters Alexander remains a front-man for the Utah Bankers Association and American Bankers Association chairman-elect Harris Simmons, the Zions Bank CEO, in their well-orchestrated campaign to thwart FOM and product expansion by CUs. The other U.S. senator from Utah, Robert Bennett, also a Republican, was not mentioned in the Deseret News article but has been quoted by CU lobbyists recently voicing support for CUs though Bennett voted against H.R. 1151 five years ago. Meanwhile, the debate over the Alexander resolution put forward by the joint House-Senate Financial Institution Task Force coupled with the fallout from that unfavorable FOM ruling by a Salt Lake federal judge has taken a psychological toll on managers of Utah CUs. “I can say we all are spending lots more time on the job-the days are longer,” confessed Kris Mecham, president/CEO of Deseret First FCU, noting he is often preoccupied with answering member concerns-fanned by bankers-about “being big and whether we are doing the job of supporting schools.” The “mega” CU message in tagging the largest CUs as bank-like as well as complaints about the tax-exemption hurting schools are two issues aired frequently in public forums by the UBA but “once we explain what we have done, our members understand,” said Mecham. Nonetheless, the job of defending the CU role takes time away from running the business, said Mecham who insisted still that a TV branding/awareness campaign started by the November is producing positive results. “It’s playing well with the public,” said Mecham noting his own $300 million CU which converted to federal charter in 2003 and has a membership base tied to the Mormon Church, has not suffered a loss of members during the bank/CU battles. While Deseret First remains engaged in the resolution fight, he said, the Dec. 8 FOM court ruling by Judge Dale Kimball rejecting a six-county expansion has not put a damper on Deseret First’s expansion plans to build its first out-of-state branch in Mesa, Arizona in the fourth quarter. Deseret First has long said it seeks to reach Mormons living outside of Utah in neighboring Arizona and southern California. While banking’s chief target remains America First FCU and Mountain America, the state’s two biggest CUs, Deseret First “is in the gunsights” too, said Mecham, a fact that CU managers have long understood in girding for the upcoming battle in the legislature. Nonetheless, the bankers campaign in Utah, he said, is “well thought out in looking for a victory” and passage of the Task Force resolution represents just one phase. Since New Year’s, the Salt Lake media has devoted considerable ink to the bank/CU clash with articles carrying sharp exchanges between Scott Simpson, the Utah League president/CEO; and Zions Bank CEO Harris Simmons, a CU nemesis. In one article, Simpson accuses Simmons of trying desperately to “have something he can hold on to” to underscore taking “the throne at the American Bankers Association.” A Zions spokesman fired back that the League CEO’s remarks were “laughable” since Simmons already holds the ABA reins as chairman-elect and the real issue is the legislature’s intent to bring Congressional oversight over CU expansion. Regarding Judge Kimball’s FOM ruling, Christensen, the Utah League chairman and president/CEO of Tooele FCU, conceded his CU is temporarily hampered-awaiting clarification from NCUA-before pursuing further expansion beyond Tooele County. “The NCUA has done a great job in providing us information,” said Christensen maintaining the issues raised in the court case will be handled in due course but the CU position can be “shored up and made stronger.” Judge Kimball’s ruling “was simply a hiccup-a speed bump” for CUs, Christensen concluded. [email protected]

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