<p>ARLINGTON, Va.-In the face of declining membership numbers and a shrinking pool of potential members, NAFCU still presents an active role in credit union political affairs. As NAFCU's leader passed the two-year mark last week, President and CEO Fred Becker was working to increase the association's membership despite the falling number of federally chartered credit unions. "We're doing everything we can to encourage people to join," Becker said. He added that he reminds his staff, "Everyone here is in membership recruitment everyday." NAFCU membership statistics peaked at the height of the H.R. 1151 battle, but have dropped off since that time. Membership dropped from 1,016 at year-end 1999, to 959 in 2000, to 901 at the end of last year, according to NAFCU's data. Some of the blame can be placed with the flood of federal to state charter conversions that occurred following the passage of the Credit Union Membership Access Act. However, 29 state chartered credit unions did decide to maintain their membership with NAFCU, despite the group's federal focus. Becker credits their long-term relationships with NAFCU and that they have seen the benefits of membership. Many of the credit unions, he added, are military related and like NAFCU's attention to issues such as on base property leasing. He also commented that enhancing the federal charter, NAFCU's number one issue since Becker took the helm, helps strengthen the dual chartering system and issues, like bankruptcy reform, cross charter lines. In the struggle to enhance the federal charter, Becker said, "Looking back two years ago.it's remarkable progress we've made given progress is slow in Washington." On the regulatory side, he pointed out the NCUA Board's approval of the San Francisco community charter and the less argumentative attitude of the NCUA Board. "The regime that Mr. Dollar created with Reg-Flex.and incidental powers is giving federal credit unions a real competitive edge when it comes to charters." Becker also noted House Financial Services Committee Chairman Mike Oxley's (R-Ohio) upcoming legislation for regulatory relief. With the changes in the regulators and the laws, Becker commented, "There's not a lot more you have to add to completely solve the problems." However, he emphasized that NAFCU will always look for ways to further enhance the federal charter. While NAFCU can stake a claim to political victories, it has done so without much of a popular motivator in Washington: money. NAFCU/PAC has consistently hovered around $100,000 per two-year election cycle. By year-end 2001, NAFCU/PAC had raised just over $28,000, nearly half of the year before, which can be partially attributed to the cancellation of the Congressional Caucus following the September 11 attacks. The PAC disbursed $49,280 and closed the year with $39,000 in its coffers. "Our PAC has met our needs as I have seen over the past year." Becker said. "Could we do better and are we looking to do better? Absolutely." NAFCU/PAC has gotten the trade association to the events that it needed to attend, he said. He noted a dinner with Oxley that he and Senior Vice President and General Counsel Bill Donovan attended at which NAFCU was the only credit union representative of just 12 total guests. NAFCU plans to continue to pursue the enhancement of the federal charter, maintain its vigilance against expanding the NCUA budget, continue lobbying for bankruptcy reform, ensure the NCUSIF is not merged with the Bank and Savings Association Insurance Funds, work with NCUA to update its strategic plan to eliminate references to the regulator as a partner with credit unions, work to ease credit union participation in Small Business Administration loan programs. With its successes for federal credit unions under its belt and the decline in federal charters, NAFCU considered the possibility of branching out. "The board looked at it a year ago and decided to maintain our focus on federal credit unions," Becker explained. He said the decision was based mainly on the "historic interests of the association," but he clarified that if the same decision is placed before the board five to 10 years from now, no one knows what the outcome might be. Aside from legislative and regulatory achievements, Becker has been reworking the innards of NAFCU, itself. The lobby group has been focusing on how to keep a strong staff, while allowing turnover for fresh blood. Since Becker took over the trade association the employee turnover rate at the organization has plummeted. In 1999, the turnover rate was as high as 41%. After Becker was hired, January 31, 2000, the turnover rate dropped dramatically to 32.8% and again for 2001 to 25.4%. Becker said he does not have a specific goal in mind but to "keep it as low as possible." Becker said that when he started, one of the employees' major concerns was the salary and benefits package. He explained that they "contemporized" the benefits (for example, switching from a money purchase plan to a 401K) and increased salaries. He said that graduated vesting in the 401K plan also encourages employees to stay on. Over Becker's tenure the salaries increased approximately $400,000 in aggregate, jumping from $2.7 million in 1999 to an estimated $3.2 million for 2001, while at the same time increasing from 58 to 63 employees. NAFCU is currently undergoing an audit by Washington accounting firm Tate & Tryon. Since the changes, participation in NAFCU's retirement program has soared from 64.8% participation in 1999 to 82%. If the ineligible employees are subtracted out, those with NAFCU less than six months, the participation rate increases to 92%. The cost of benefits increased from $716,800 in 1999 to $797,696 for 2000. In 2001, the cost is expected to dip to around $749,000. Becker said the advantages have been well worth the expense. NAFCU holds itself to the same standards it is encouraging at NCUA. Overall expenses have dropped from $7.8 million in 1999 to $7.56 million in 2000 to an estimated $7.5 million for 2001. Revenue dipped slightly for the trade association from $8.1 million in 1999 to $7.8 million in 2000, which Becker said was due to NAFCU dropping its technology conference. Revenues for last year are expected to rebound to $8.3 million. [email protected]</p>