The first issue of Credit Union Times for the year means it istime once again to peer into the crystal ball for my annual creditunion industry predictions for the next 12 months. No matter howcredit unions are measured, impressive records will be achieved invirtually all significant categories as the year 2004 unfolds.These include huge membership increases, stepped up mortgagevolume, expanded trust account services, and a substantial increasein member business loans. Also, watch for the number, type, andvariety of FOM expansions to explode, a large growth in totalassets, the introduction of many more new products and services,and the introduction of major improvements in technology. But therewill be two exceptions to all these positive developments. Thefirst one is obvious. The number of credit unions will continue todecrease significantly. There will be over 400 fewer credit unionsby the end of the year due to mergers and liquidations. A highpercentage of disappearing CUs will come from the declining ranksof small credit unions. But at least four mergers will involve goodsize CUs. The second exception is far more important. Withever-larger geographic fields of membership, the competitive ratedifferential gap continuing to close and a substantial increase incredit unions choosing to go the community charter route, overallmember satisfaction will decline. Credit unions will continue tolargely ignore this trend and thus do little if anything to halt orreverse it. After speculation run amok, an unknown Republican withno connections to credit unions will be nominated by President Bushfor the NCUA Board position currently occupied by Chairman DennisDollar. Because of election year politicking, confirmation willdrag on seemingly forever. After an additional five months as alame duck, Dollar will reluctantly decide it is time to move on andset up his own private sector credit union consulting firm. Dollarwill leave behind a two-person NCUA Board. Current NCUA BoardMember and Vice Chair JoAnn Johnson will move up to the Chairman'sposition. There will be several one-to-one tie votes in NCUA Boardmeetings until it once again becomes a three-person board.Washington, D.C.-based Dollar and Associates will not be a longtermventure. Instead, it will position the popular chairman foreventual greener CU pastures. Unrelated Business Income Tax (UBIT)will capture more headlines next year, involve a total of at least14 states, and consume a much greater portion of credit unionindustry human and financial resources. Typical of the slow-motionIRS, in the end nothing much will change. For the first time in thehistory of credit unions, it will take $1 billion to be listed inthe top 100 credit unions based on assets. A total of 20 more CUswill join the billionaires' club. No new conversions from creditunion to mutual thrift will occur in 2004. Because of state-levelbanker attacks and UBIT threats, the number of conversions fromstate to federal charters will increase significantly. The trendtowards conversions to community charters will greatly accelerate.No large credit unions will join Patelco in converting to privateinsurance for their primary insurance coverage. As they did withwhat started out as a single sheet proposal but eventually passedinto law as a voluminous document known as H.R 1151, bankinglobbyists will swarm all over credit union specific proposedlegislation already in the pipeline. They will not attempt to killthe legislative initiatives, but will seek ways to re-craft creditunion proposals to fit their own goals. The nationally orchestratedstate by state anti-credit union campaigns by the banking industrywill be stepped up and involve approximately 17 states by year end.All banker attacks will fail after first appearing to succeed lathe Utah scenario. The banking industry lawsuit against NCUA willalso fail. The ABA will undergo a couple of important changes; oneat the senior staff level and another in its governance structure.At the state level, the outspoken head of the Utah BankersAssociation, Howard Headlee, will meet the same fate as Scott Earl,former CEO of the Utah Credit Union League proving again that whenthe team doesn't win it's the coach who gets fired. The choice forthe new NASCUS CEO to replace booted Doug Duerr will be a bigsurprise. (Hidden agenda?) It will be followed by two importantstaff changes in short order. Over at CUNA, there will be a majorsurprise announcement concerning senior staffing within the firsthalf of the year. One more time, bankruptcy reform, despite anotherbig increase in personal bankruptcies throughout the year, willagain be a priority for credit union lobbyists. And once again itwill not pass. Credit union CEOs near retirement age willorchestrate at least four good-size mergers, finishing theircareers as highly compensated EVPs with very light workloads. Inthe bad news department, robberies will increase dramatically andthey will be more violent. The numbers for white collar crime willalso go up and the dollar amounts involved per incident will berecord setting. More than two dozen vendors will debut asadvertisers in the pages of this publication as further evidencethat credit unions have emerged as a potentially profitable marketfor suppliers who once thought all the action was with banks.CUNA's Future Forum in Hawaii will attract a record crowd (mostlyvolunteers) making it the best attended credit union conference ofthe year. Finally, in the slam dunk predictions arena, at least sixmore high-profile credit union CEOs will find out the hard way thattheir fate is in the hands of their volunteer boards as theyunexpectedly join the ranks of the unemployed. However, no boardmembers will be fired. Check back in December to see if this year'scrystal ball is in good working order. Happy New Year!