ALEXANDRIA, Va. - NCUA has taken its fair share of lumpsrecently from the bankers, legislators, and even the credit uniontrade associations.

"I would distinguish," CUNA Deputy General Counsel Mary Dunnexplained. "I do think that NCUA has been attacked by the bankersto hurt credit unions." The recent barrage is part of their "bigplan to really clip the wings of NCUA."

CUNA's recent swipe at the agency for the last-minutecancellation of the May board meeting, where the agency wasexpected to issue its final rule barring non-multiple common bondcredit unions from adopting underserved areas, was part of the"normal course of business." Dunn explained, "In our view, CUNA'sgoing to have disagreements with NCUA.I do think it would beinappropriate if we always agreed with NCUA.But I think that's incredit unions' best interests." She pointed out that the move"perpetuates uncertainty" in field of membership.

NCUA Chairman JoAnn Johnson explained of the cancellation thatthe agency wanted to "craft the best regulation we could." Sheadded, "As soon as it's ready, it will be on the agenda."

The rule came out of a lawsuit filed by the American BankersAssociation in a Utah federal district court; just a couple yearsago, the same court remanded a community charter decision back tothe agency, which led to the repeal of a six-county communitycharter. "I think they will be going through the final rule with afine tooth comb. It's shameful," Dunn commented.

NCUA Board Member Gigi Hyland agreed. "Any increased scrutinyfocused on the credit union system makes it more complicated" forcredit unions to tell their own story and for the agency to outlinefor itself how it regulates credit unions. However, sheacknowledged, "There are certainly some items on the agency's platethat are complex and merit thoughtfulness." The complexity has"engendered more attention." The agency must be deliberative andensure its actions are justified and in accordance with thelaw.

"It's not surprising that there's criticism," the chairman saidof the bankers. "Anytime you're moving forward on a pro-activeagenda there might be some criticism.It certainly doesn't detourany type of work we're doing." Johnson added, "When the noise isthe loudest sometimes, I think there's some desperation andfrustration coming out on their part." Banks' market share is thesame and they are earning record profits, so the problem forcommunity bankers really is other market forces, but credit unionsare a convenient diversion.

"We certainly don't want a regulator that's embattled socertainly we don't welcome the attacks from the ABA," NAFCU SeniorCounsel Carrie Hunt said. She said that a lot of the critical noisethat has been generated has come from the bankers' more aggressiveposturing. "There are no secrets about that," she said.

NCUA has even taken some hits from prominent and highly relevantlegislators. "A lot of criticism that comes from the Hill, some ofthat came from the rhetoric from the bankers," Dunn stated.

Hyland also pointed out, "The bigger credit unions callattention to themselves and get the attention of the legislators aswell as the banks."

In that vein, when two billion-dollar-credit unions had to takeNCUA to court to convert to mutual savings banks, it caught theeyes of their own state congressman Jeb Hensarling (R-Texas), whoalso happened to be drafting the regulatory relief legislation inthe House, and Financial Services Committee Member Patrick McHenry(R-N.C.).

"The banks have gotten some traction on conversions by the merefact that hearing even happened," Dunn said.

On the other hand, Hunt said, "Even McHenry, he poked fun at hisown comments."

Also, in a hearing late last year, House Ways & MeansCommittee Chairman Bill Thomas (R-Calif.) was openly critical ofthe agency and has requested a Government Accountability Officestudy into its corporate governance. "In terms of Chairman Thomas,he.looked at a whole host of things from a critical standpoint. Anyagency can be called upon at anytime to justify how it's runningbusiness," NAFCU's Hunt said.

Hyland said of the two issues, "We have to go on, literally, therecord that is before us." At the conversions hearing, sheemphasized, the subcommittee took a wait and see approach. The Ways& Means hearing highlighted that there is no appetite to taxcredit unions right now. "We have to take whatever the record hassaid.as a predictor," according to Hyland.

"Good policy makes good politics," Johnson said. "I'll worryabout the good policy and let them work on the politics."

Credit unions and their trade associations have also worked toraise their visibility on Capitol Hill while the agency hascollaborated with other parts of the federal government on commongoals. "We work to develop relationships and being able to havegood communications.I think it's been a very successful effort onour part," Johnson said. Hyland reinforced the agency's opencommunications policy, which she said "parallels what you see otheragencies doing." "The folks on the board now are verywell-connected and very well plugged into political nuances," Dunnsaid, as well as senior staff. [email protected]