The credit union industry is determined to "do something" in the 110th Congress to expand their ability to serve virtually anyone, anywhere, and to further expand their ability to offer commercial lending services to their customers. Every time they do so, they do so at bankers' expense.

We're told that a "deal" is being discussed in Washington whereby credit unions will be able to expand into "underserved areas", but that the term will also be more narrowly defined. In exchange for banker agreement on that expansion, bankers will receive some red tape relief, most notably in the area of filing Suspicious Activity Reports (SARs) for certain customers with whom the bank has an established relationship.

Frankly, this particular proposal is absurd, at least in our view. I'm told that it's being pushed at the direction of House Financial Services Committee Chairman Barney Frank (D-MA), and that he is really putting the pressure on bankers to go along with this proposed compromise if they want to get anything done going forward.

We're of the belief that, after the November elections, it's going to get a lot worse for bankers in Washington, unless and until they decide they've had enough. It's one thing to give a little by way of political compromise It's quite another to give and give and give without having the basic problem addressed. And that problem is that large (but not all) credit unions are engaged in a deception and are abusing the American taxpayer in the process.

What's the deception? They pretend to be something they're not. They pretend to be small, financial cooperatives that are open only to "members". But the "membership" charade is a ruse and means virtually nothing when all you have to do to become a member is have $5 in your pocket or be able to spell the abbreviation for Oklahoma correctly.

There is very little time left in this Congress to take up anything that's meaningful. The problem is that even if we are successful in killing the credit union expansion effort in the Senate, if it passes the House it will have established a precedent on which the credit unions will try to build and expand next year. With the Democrats likely to take firmer control of both the House and Senate after the November elections, the bankers political strength will be put to a new test.