WASHINGTON — It's not as alluring a topic as Michelle Obama's fashion choices nor does it resonate with the public like a tax bill, yet for credit unions and their advocates here there are few subjects of greater concern than how they will be regulated once Congress and the new administration deliver on their promise to revamp the oversight of the financial system.Congress has promised to make it one of its top priorities, and during the campaign President Obama spoke of the need to move quickly to change a system that he described as antiquated.Obama never mentioned credit unions either positively or negatively when discussing the financial crisis. Others, however, have been less reticent.House Financial Services Committee Chairman Barney Frank (D-Mass.) favors keeping the NCUA as an independent agency. Sen. Charles Schumer (D-N.Y.), the No. 3 member of his party's leadership and a member of the Banking Committee, has said combining regulators would be a good idea. The Government Accountability Office, Congress' investigative arm, said consolidating regulators should be examined but declined to make a recommendation. CUNA and NAFCU have both weighed in strongly in favor of keeping the NCUA separate.Credit unions and their allies have been nervous since last year when then-Treasury Secretary Henry Paulson issued a Blueprint that called for putting banks, thrifts and credit unions under one regulator. Although his plan never went anywhere in the Democratic-controlled Congress, lobbyists for CUNA and NAFCU expressed fear that the plan would at least be a starting point for discussion. But the Bush administration's efforts to deal with the worsening economy, coupled with the limited window of opportunity during an election year, resulted in no action.That could change with the new Congress and new president.Frank told Credit Union Times recently that he favors keeping the NCUA independent and said the Paulson plan was a "nonstarter." He said the restructuring efforts would focus on those agencies that oversaw the financial institutions that caused the financial crisis, such as hedge funds and some of the bigger banks.Because the Obama administration is still getting organized-Treasury Secretary-designate Timothy Geithner's confirmation has been held up because of his well-publicized tax issues-and none of his department's subcabinet officials have been named-there have been no indications about how quickly they plan to ask Congress to take up restructuring or what their preferences are.While Frank's words were reassuring to NAFCU President/CEO Fred Becker, he said credit unions should not let their guard down. "We have to make sure we don't get swept up in the tidal wave. No one is coming at us directly, but there is a danger that in a big restructuring effort, we could be impacted." Becker also expressed concern that Congress will act too quickly and not consider long-term implications.CUNA President Dan Mica said because credit unions didn't cause the current crisis they shouldn't be penalized. "I worry that we will be punished. It's like when one student throws a spitball and everyone is asked to stay after class. And credit unions are already overregulated. We are trying to separate out credit unions from other financial service providers."Schumer has not mentioned credit unions specifically but has talked about the need for consolidating government regulators of financial services.During a speech last year, Schumer focused on hedge funds, insurance companies and investment banks but spoke of the overall virtues of having one large financial services regulator.He said one regulator would bridge the gap between commercial banks which are "supervised closely" those other institutions which are regulated lightly.Congress will "look closely at unifying the regulatory structure, perhaps moving toward a single regulator," he told the Securities Industry and Financial Markets Association on Nov. 10.The Government Accountability Office issued a report on Jan. 8 said Congress should "seriously consider the need to consolidate depository institution oversight among fewer agencies." It does not take a position on keeping the NCUA separate though it does acknowledge letters from CUNA and NAFCU supporting keeping the status quo.The GAO urged lawmakers and other policymakers to "minimize conflict in regulatory goals across regulators" and to keep the dual federal and state chartering structure for financial institutions.While the GAO report does not have the force of law, lawmakers tend to take its recommendations into account when formulating policies.–[email protected]