WASHINGTON-The credit union glass is half full.

That was the general assessment of participants at a symposiumthat the NCUA organized last week to celebrate the 75th anniversaryof the Federal Credit Union Act and discuss the future of thecredit union movement.

“Given their reputation and strengths, credit unions could beseen as unbiased providers of consumer information,” saidconsultant Scott Sommer, during a discussion of the relevance ofthe cooperative financial system. “That's important duringdifficult times. Also, there is an increased demand for debitcards, and there are opportunities for credit unions to help smallbusinesses being ignored by other providers in themarketplace.”

Matt Davis, director of public relations of North Carolina-basedMembers Credit Union, said credit unions have the potential tothrive but will only do so if they make their passion contagiousand expose new groups of people to the advantages of creditunions.

“We have a choice of being relevant or going away. And relevanceis only possible if we innovate and attract more young people anddevelop credit unions around people with common interests, whetherthat's gays and lesbians or motorcycle riders,” he said.

Much of the discussion centered on two of the biggest problemsfacing the credit union movement?corporate credit unions andcapital.

NCUA Board Member Gigi Hyland, who organized the conference,said the board would most likely issue proposed regulations in thefall for restructured corporate credit unions but that could changedepending on the wishes of NCUA Chairman-designate DeborahMatz.

Hyland said the problems of the corporates could cause someTreasury Department officials to push for changes in the structureof the NCUSIF.

“They think the current set up is pro cyclical and compounds theproblem if there are difficult times,” she noted.

Some credit unions and regulators have argued that credit unionswould be more competitive if they were allowed to raisesupplemental capital. But during a discussion on the subject, therewas disagreement on its merits between NASCUS Chairman GeorgeReynolds and NCUA Deputy Executive Director Larry Fazio.

“We see [allowing additional capital] as a fundamental safetyand soundness issue. It's not for everyone but should be a tool inthe tool box,” Reynolds said. “All other depository institutionshave it, and it is an extra layer of protection for the insurancefund.”

But Fazio said that while his agency was still discussing theidea and meeting with NASCUS and other outside groups, he hasserious reservations.

“The idealist in me says we need supplemental capital, but thepragmatist in me worries,” Fazio said.

Among his concerns are that the “real-world image of creditunions will be hurt if widows and orphans lose their money oninvestments through credit unions,” he said.

The conference was held in the Hyatt Hotel on Capitol Hill. Andagency officials placed photographs of key moments in the historyof federal credit union movement in the conference room. Severalspeakers noted that the Federal Credit Union Act was signed byPresident Roosevelt at the height of the Great Depression in 1934because many existing financial institutions weren't servinglow-income populations. Credit unions began in the United States in1907 but were only chartered on a state-by-state basis until the1934 law took effect.

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