After the hearing on H.R. 3206 in May, all of us watching mutualcharter conversions waited to see how NCUA would react. Based onthe proposed regulations, it is apparent NCUA didn't get themessage. It continues to thumb its nose at Congress and thecourts.

H.R. 1151 authorized NCUA to promulgate rules for conversionvoting that were to be “no more or less restrictive than thoserules that apply to charter conversions by other financialinstitutions.” Congress wanted ministerial rules, at most.

However, with this third re-write in as many years, adherence tothat mandate–if it ever existed–is now a distant memory. NCUA'segregious over-reaching is setting up the industry for more of thesame public relations calamities and governance fiascos reportedrecently in the Credit Union Times, even ones triggered bycircumstances unrelated to conversions.

At Columbia, for example, it has regrettably meant multiplelawsuits, the postponement of the annual meeting, and inevitabledistractions from strategy. Save CCU's activists are now battlingformer Save CCU-endorsed directors. Much to the chagrin of theircollectivist-minded comrades, the targeted directors haveapparently abandoned their socio-political activism in favor of thebroader interests of Columbia's membership. What all thisinternecine fighting has to do with providing high-quality serviceand competitive products–which is all that nearly every creditunion member cares about–completely baffles us. Meanwhile, SaveCCU's NCUA-triggered lawsuit caused a Washington state court torule credit union members are no different than members of amutual. The precedent-setting ruling contradicts the jingoisticanti-conversion message the boys at the American Association ofCredit Union Leagues and the National Coalition for Member Trustare so fervently trying to spread. In fact, contrary to theirclaim, the court decision means directors cannot be sued forrecommending a conversion. Over in Michigan, DFCU Financialprevailed in a lawsuit funded by the anti-conversion group led byJim Blaine and Bucky Sebastian. Their local agents were demanding ameeting to remove DFCU Financial directors in sweeping retributionfor allowing members to vote on a conversion. In reaction to DFCU'svictory, David Adams, CEO of the Michigan league and ringleader ofthe local anti-conversion forces, indignantly insisted that NCUArequire the wasteful meeting–one that would only serve to magnify aglaring credit union governance defect, imperiling the collectiveinterests of all members and the safety and soundness of theinstitution.

The future of these star-crossed credit unions, and others, isbeing threatened by a gaggle of screeching left-of-centeractivists, self-serving former employees, and self-interestedleague and “movement” people. NCUA proposes to empower theseunregulated radicals to insert themselves into the communicationsmix between directors and members. Should more credit unionscontinue to fall prey to socio-political activism, the whole creditunion industry will become a laughing stock in the eyes ofconsumers, rather than the bona fide option for banking servicesthe industry wants so much to be. Lee Bettis Executive DirectorCoalition for Credit Union Charter Options Washington