WASHINGTON — CUNA's Governmental Affairs Conference displayedits usual elements this year. Politics, legislation and Hill visitsplayed a part, as did a customary defense of credit unions frombanker attacks and a measure of pageantry at the opening generalsession.

But like an unfamiliar and unwelcome guest, sometimes explicitlyand sometimes only beneath the surface, the issue of whether andhow credit union will be able to or allowed to respond to thesteadily darkening economic situation in the U.S. kept worming itsway into different parts of the four-day event.

It popped up in the conference's general session on March 4, inthe speeches of CUNA CEO Dan Mica and other leaders, and carriedover as a theme in some of the breakouts as well. CU leaders andregulators both sought to encourage credit unions to reach out totheir members who may be suffering the effects of the creditsqueeze and carried on discussions on how best to do that.

Mica told the record-breaking 4,700 attendees that history hasshown credit unions prosper even in a bad economy and now is notthe time to begin to withdraw from the market.

“History has shown us that in economic trouble and uncertainty,credit unions grow,” Mica told the attendees at the generalsession. “People look for safety, compassion, sanity and someonethey can trust at times like these. Don't circle the wagons. Workwith people. Make loans with logic, care, and sound underwritingbut make loans,” he said. “Reach out to folks with toxic loans. Youmay not be able to help all, but the ones credit unions help willbe members for life.”

But, of course, Mica's comments followed a more familiar messageof disdain for the continuing attacks from bankers. Urgingattendees to remember the days after the 9/11 terrorist attacks,Mica recalled how bankers at the time put a higher priority onattacking credit unions than fighting terrorism. In a similar way,he said, bankers have put fighting credit unions as a higher agendaitem than getting past the current economic situation.

“Now, in 2008, the biggest financial services story in theworld, not just the U.S. but the world, is the subprime crisis andthe resulting economic downturn,” Mica said. “But the bankerslatest new list of legislative priorities still puts dealing withcredit unions above dealing with subprime problem. I submit that istrue zealotry on the part of the bankers and not appropriate publicpolicy,” Mica added.

Mica used his remarks on public policy to highlight the mostrecent move to get at least a few parts of credit unions'regulatory reform agenda passed. In particular Mica discussed thelatest bill, the Credit Union Regulatory Relief Act (H.R. 5519),which has been introduced by Representatives Paul Kanjorski(D-Pa.), Ed Royce (R-Calif.), and Barney Frank (D-Mass.) and whichhave some have dubbed the son of CURIA.

The new bill includes many of the regulatory relief items ofCURIA but not all of the enhancements, such as risk-based capitaland more expansive business lending provisions. It does include atweaked version of the provision to allow all federal credit unionsto adopt underserved areas and would allow payday loans to allpotential members, according to one credit union lobbyist.

Mica praised the new bill as the measure that CUNA and thelegislators believed they could pass this year. He urged theattendees to support the new measure and CURIA as well, arguingthat CURIA's provisions remain a priority even as the new billmight have a better chance of making it into law this year.

“When you go to the Hill tomorrow we want you to take thismessage to your legislators that both measures are important andthat we want their support on both measures,” Mica said “And sincethose folks are taking heat from the bankers for backing our bills,be sure to show them lots of appreciation when they come and speakto you tomorrow.”

NCUA Board Vice Chairman Rodney Hood followed on Mica's theme,urging credit unions to help more people during the currenteconomic crisis, which he noted is receiving steadily increasingattention.

But Hood also used the crisis as the basis for an argumentagainst credit unions being covered by the Community ReinvestmentAct, making the case that the current economic conditions show CUsare helping their members not because they have to do so butbecause it's the right thing to do.

Hood told the attendees about a case of a single mother in NorthCarolina who had been made a toxic mortgage but had been able tomake the payments until the rates reset and she was in danger oflosing her home. She turned to her credit union for help in movinginto a better mortgage, Hood said, an example of a CU doingsomething “not because there was some punitive rule that said theyhad to, but because it was the right thing to do.”

Hood noted as well that the organization that had made the badmortgage had a CRA obligation, indicating that merely having CRAwas not enough to ensure that a financial institution does theright thing — something CUs do because that is the sort ofinstitutions they are, he said.

NCUA Board Member Gigi Hyland also urged credit unions to helpmembers in the downturn but also used her remarks to urge attendeesto review the report of the Outreach Task Force she chaired andshare their comments with NCUA.

Hyland reviewed the process that led to the report and receivedapplause when she recounted the message from CUs not to increaseregulatory burdens and how to better tie together the agency'spolicy and practice, particularly when it comes to credit unionsreaching out to underserved communities.

She discussed the Task Force suggestion that NCUA would be ableto gain more knowledge from data it already collects and perhapscollect more in a minimally disruptive way. On her final note shereminded the leaders that the NCUA Board would still have toconsider and debate the recommendations and there is a lot of roomfor CUs to let the NCUA know what they think.

“Read the report,” Hyland said. “Yes, I know its long. But readit and share it with management and board, think about the impactthe recommendations might have and let the NCUA Board know what youthink. I know you are not shy.”

Hyland's comments about the Outreach Task Force echoed some ofthe remarks from Tom Dorety, CEO of the $5.9 billion SuncoastSchools Federal Credit Union and incoming CUNA chairman.

In his remarks after formally accepting the chairmanship, Doretycited the examples of this year's winners of the National CreditUnion Foundation's Herb Wegner Memorial Awards as credit unionleaders who have proved there is no conflict between the reachingout to people in need and the routine work of credit unions.

“We clearly have gotten the message in the last few years,”Dorety said, “but if we move a little quicker and more concertedeffort, this will become a non-issue for our regulator and ourlegislators, and we will prove we do a much better job than banksdo in serving working class Americans.”

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