FEDERAL WAY, Wash. -- Joining CUNA's hard-line campaign todefeat the Treasury's regulatory reorganization plan, the head ofthe Washington Credit Union League Friday called the package"inexcusable" and badly flawed but finds there are positives and CUopportunities since "re-regulation is inevitable."

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Like other state league president/CEOs, John Annaloro of the130-member CU Washington group fired off stern opposition lettersthis week to Treasury Secretary Henry Paulson but also said the"Blueprint" draft, once fixed, "potentially offers a vastly moreinteresting CU future."

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That's because CUs "could then have all the powers of nationalbanks and full business lending powers, no FOM restrictions unlessself-imposed in the board room, and lower capital standards."

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Annaloro emphasized that the tax exemption section of the"Blueprint" would have to be vastly rewritten to empower only those"federally insured deposit institutions that are cooperativelystructured, operate on a nonprofit basis, have unpaid directors andno equity ownership for CEOs and executives."

"There would also have to be assurances that small CUs becomingFIDIs would not be crushed beneath additional regulatory burdens,"he said adding, however, "this is an "an achievable agenda. Inother words, "in exchange for participation in the broader federalobjectives, diminished state oversight and possibly CRA, we mightsee a fresh start with new regulators and full powers for futureglobal competitiveness," maintained Annaloro.

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In acknowledging what he said is an "opportunistic role" on thisissue among his peers, Annaloro said he has already shared hisviews with others CU leaders but has not received much feedback."It's early," he said noting the lengthy industry debate ahead onthis issue.

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