SALT LAKE CITY — Utah credit unions and banks were locked indelicate negotiations with state lawmakers last week to resolve abrewing clash over proposed changes to state laws aimed at easingbusiness lending and field of membership limits.

“I have great confidence that there are several legislators,including those in leadership, who are making every effort to getsomething done,” declared Scott Simpson, president/CEO of the UtahLeague of Credit Unions.

Early last month, the league intimated it was looking at apublic referendum this fall on CU powers coupled with specialconsumer provisions to cap ATM surcharges, return check fees andpayday loans, all viewed as a way of breaking the banker-imposedimpasse on CU expansion.

The league said proposed bills in the legislature now wouldincrease the amount a credit union can loan to its members to 10%of assets from the current 1%, and eliminate a requirement thatborrowers be CU members for six months before receiving a businessloan.

In addition, league bills would raise the business loan limit to12.25% of a CU's assets from its current limit of $250,000 permember.

While scoffing at the notion of a “Financial Freedom BallotInitiative,” the Utah Bankers Association said it was willing tonegotiate with the league on provisions in the bills but itreserves the right to vigorously oppose giving broad, new powers towhat it called “bank-like credit unions.”

Citing the right of state CUs to convert to a federal charter toseek redress, Howard Headlee, the president of the UBA, referred toa series of articles on the referendum idea and the CU/bank disputeappearing in Salt Lake papers in recent weeks, resulting in callsfrom Utah legislators for the two sides to make peace. Calling thepositions of the two sides “posturing” and urging they seek commonground, Senate Majority Leader Curt Bramble (R-Provo) acknowledgedin the Salt Lake Tribune that CUs and banks are very “differenttypes of institutions and both play a vital role in the state'seconomy.”

For his part, Headlee said bankers “would like to resolve ourconcerns with the league without wasting energy of the legislaturebut we think it is a poor way to conduct negotiations by using themedia.”

Headlee reiterated that his association has no quarrel with the“small, traditional credit union” but objects strongly to thetactics of large CUs in the state.

He said UBA has “made a very generous offer, but it is limitedto the traditional credit unions that are operated within thespirit of the law.”

In this session of the legislature, ULCU's Simpson has said itis looking “for any opportunity to roll back the punitive measuresof our state charter” and if need be “will go to the people” in areferendum.

–[email protected]