There are usually one or two topics that make up the “buzz” at CUNA's Governmental Affairs Conference. Often bankers and taxation dominate, or a piece of legislation like CURIA. So what was it this year? Going in, I would have put my money on banker attacks, credit unions converting to banks, or NCUA's data collection proposal. While those are areas of concern, they weren't on everyone's lips. Credit union leaders I spoke with had more business issues than political issues on their minds. They are worried about bottom lines, narrowing margins, future growth, etc. CEOs are nervous about almost anything related to credit cards and interchange, where CUs derive significant income. Visa and MasterCard have a lot of power over credit unions' plastic card income stream, as merchants know all too well. Speaking of plastic cards, you couldn't have attended GAC and not felt the concern about plastic card losses. CUNA CEO Dan Mica put this issue in the spotlight during his opening remarks. CUNA Mutual, who is on the hook for card losses, wants CUs to help it battle card fraud and is trying to raise awareness. It is an interesting issue. Consumers have a lot of protection against card losses, as do Visa and MasterCard, but insurers like CUNA Mutual have to pay the tab. It paid out over $30 million in plastic card losses last year. Not good news for credit unions as more multi-million dollar payouts like these could force CUNA Mutual to lower deductibles and/or raise premiums. People also had a lot to say about image exchange. Fortunately for the industry, corporate credit unions are trying to put together a single exchange engine to bring economies of scale to the process. Once they get in line, they will bring the league service corporation processors into the mix. It's a good move because technology investment can be shared for a product (checks) that is expected to continue to decline in volume. NCUA Chairman JoAnn Johnson may have given a peek into the industry's defense of any criticism that comes from the results of the agency's new data collection initiative. Johnson stressed that Congress never originally intended for credit unions to serve only people of modest means – that language came later. It's a telling statement. Surprisingly, I found most CEOs not too concerned about data collection. They said they can tweak their systems and get to all sorts of data to show who they are serving. Many said they don't think Congress is expecting to see results that show credit unions are only serving those of modest means. Some CEOs on the other hand were very concerned, but seemed more annoyed by the fact that the banks forced credit unions into this than anything else. And of course there is concern that no matter what the results are, the bankers will be able to manipulate the data. Joy Cousminer, the firecracker CEO of Bethex FCU in the Bronx received some well-deserved recognition with a Herb Wegner award for individual achievement. I found her comments on helping the poor fascinating, especially when she noted that financial literacy is not enough. She urged credit unions to personalize the lending process for low-income folks, be prepared to take losses, and not do everything by the book. One CEO of a low-income CU told me credit unions with delinquency ratios under 2% aren't trying hard enough to serve the poor. I also got to spend some time with Cousminer the evening before her award. One thing she didn't mention in her acceptance speech is she is a rabid advocate of increasing the minimum wage as a giant first step in helping the poor help themselves – who can argue with that? One of the biggest stories coming out of GAC came from a couple billion dollar CU CEOs and a CU CFO who were trying to get the word out about their new organization, The National Center for Member Trust. They were spreading their “propaganda” through fliers. I kid about propaganda – this organization is long overdue and they are doing what the trade associations wouldn't. The new organization will serve as an advocate for the credit union charter anyway it can, and it's clearly a response to the wave of CUs converting to banks. GTE FCU CEO Bucky Sebastian is leading the charge as chairman, a CEO who has done it all and is concerned the credit union story isn't being told enough. The group was able to raise $250,000 at GAC alone – an unbelievable amount for a few days work. It is hoping CUs will donate $1,000 for every $100 million in assets they have. Not a bad formula. This is not meant to exclude smaller CUs by any means. The group will gladly accept any amount of money a credit union can spare. There were some smart people behind this new organization, especially in light of the news of DFCU Financial suing the Michigan CU League. (See related story on page 1.) It is a 501(c)4 based out of North Carolina, which gives its officers considerable protection against lawsuits. I wish them well. CUNA is apparently in the process of relocating the GAC to the new convention center. The general sessions were packed (though I still think they can get more chairs in there) and some exhibitors have been forced into a separate exhibit tent because the main exhibit halls are out of space. The problem is many attendees never make it to the add-on tent which is on another level. I personally like the coziness of the Washington Hilton & Towers and think it is a good space. There's also no better way to meet contacts than traveling down the single escalator to the lower level where all the action is. Then again, trying to get a seat in the restaurant at lunch time is a battle. One final observation about GAC – the emcees were excellent. Paul Berry, an outside consultant, had impeccable delivery and just enough humor. Not to be outdone, Bob Schumacher, a National Credit Union Foundation director, was as polished as ever as master of ceremonies of the Wegner dinner. -

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