As everyone knows by now, CUNA selected Bill Cheney as its nextpresident/CEO. While I touted a month ago the strength of choosingan industry insider (Editor's Column, April 7), I really wasn'tsure CUNA would follow that line of thinking. That's what drove meto write the column in the first place, because I understood thatthey were leaning toward another member of Congress. I felt thiswould have been the wrong move at this time.

Dan Mica brought credit unions credibility on Capitol Hill whenthey were working to pass H.R. 1151. Now, the industry is havingfinancial and operational issues, and a credit union insider iscalled for.

I previously wrote that the current economic climate calls forsomeone who has worked inside a credit union and that experiencerunning a trade association and all the nuances that go with itwould also be a plus. “Someone running a trade association servesmany constituents beyond the members, such as the board, members ofCongress, regulators, the press and its own staff. The candidateshould be able to field all their questions and concerns, debatethe topics in a civil manner and perform the occasionaldodge-and-weave maneuvers,” I wrote. I think California CreditUnion League President/CEO Bill Cheney fits that description to atee. He's worked in credit unions and in trade associations. He'scomposed, even when taking questions on Capitol Hill as I'vewitnessed first-hand. And, judging by the interview he grantedCredit Union Times shortly after the official announcement, he cananswer, yet not answer questions.

He, like all of the candidates, does come with some baggage.Cheney was named, along with the other board members, in a lawsuitcharging some WesCorp executives and board members of negligenceand breach of fiduciary duty. He served on the board from 1999until 2006, resigning to take the helm of the CCUL.

Now that the NCUA is involved in the suit, it could take a turnin a different direction. Stay tuned, but I think this could blowright over for CUNA and Cheney, who wasn't even on the board ofWesCorp at the time of conservatorship. Either way, in the longrun, it won't be a huge deal for either.

On the other hand Corporate America's lawsuit on securitiesviolations against U.S. Central executive and directors, of whichCheney was one at the time of conservatorship, is going to trial.It could be problematic if the judge rules in favor of theplaintiffs. A risk the executive committee apparently felt wasoutweighed by the benefits.

And, according to the California league's 2008 990, revenuesdropped from $16.7 million the previous year to $10.3 million,while assets plummeted by $5 million. At the same time, while itsmembers were dealing with one of the roughest economic recession inthe entire country, the league cut expenses from $16.5 million to$14 million. On a related note, CUNA's financial status shouldimprove in the future now that it's completely depleted its U.S.Central investment.

Additionally, Cheney had previously served on the NAFCU Board aswell as CEO of Xerox FCU. This should do one of two things: eitherget CUNA and NAFCU making nice with each other or pave the way tosome sort of combination. He said he personally believes over timeit would be beneficial to credit unions if the industry spoke withone voice in Washington, but it's up to the credit unions todecide.

From my dealings with Bill Cheney, he seems very even tempered,which is just the level-headed image CUNA needs to portray whilemaking its arguments to policymakers.

Cheney is well-versed on the myriad issues circling overWashington. At the same time his new position was announced,members of Congress were tinkering with regulatory restructuring,which raised several red flags for credit unions. The Senateapproved an amendment removing language that would have requiredfinancial institutions to report to the CFPB the number and dollaramount of deposits by census tract and other demographics.

Several other amendments were pending but had not gotten an upor down vote as of press time. One such amendment would subjectcredit unions over $1 billion that offer student loans subject todirect Consumer Financial Protection Bureau oversight. It's a badidea that would raise regulatory burden on credit unions afterCongress already eliminated the Federal Family Education LoanProgram. This provision would lead to even greater tightening ofstudent lending as school costs continue to skyrocket.

Another amendment would cap ATM fees at 50 cents, but CUNA andNAFCU argued that those fees are imposed to cover maintenance andoperational costs of running those machines.

On a D.C. side note, congratulations to Larry Blanchard on hisinduction into the Cooperative Development Foundation Hall of Fameat the National Press Club last week.

Over the Potomac River to Alexandria, Va., where the NCUA seemsto be taking a command-and-control approach. Alonzo Swann waspromptly removed from his post as NCUA's Region III director justprior to what some have termed a surprise failure of the $250million St. Paul Croatian Federal Credit Union. The credit unionwas not really on anyone's radar when the NCUA originally announcedits conservatorship; a look at its financial performance reportshows that the books weren't kept all that up to date. TheCleveland credit union reported no delinquencies through all of2009-that would have had to been miraculous. There can't be anyexcuse for that not being noticed. As of March, the books showdelinquent loans to net worth at 32.87%.

The agency is shifting to more public enforcement actionsagainst credit unions, which while not good for the institution introuble, is better for the entire industry in the long run. TheNCUA issued a letter of understanding and agreement against TremontCredit Union, together with the Massachusetts Division of Banks.The NCUA only issued one public LUA since 2006. Tremont was thesecond in two weeks.

–Comments? Email [email protected]