Twenty-five Years Strong, American Bar Association's Credit Union Committee Tackle Increasingly Complex Legal Issues

CHICAGO – They represent the legal voice for credit unions as the industry continues to grapple with a number of new territories all the while fending off perennial attacks from the banking groups. Formed nearly 25 years ago, the Credit Union Committee of the American Bar Association (ABA) boasts 168 credit union attorney members who have been there to provide counsel on a number of issues ranging from the ramifications of offering member business loans to the intricacies of forming trust companies and lately, a new wrinkle – the Internal Revenue Service’s unrelated business income tax. “There are very few resources out there for us to go to bounce off ideas that are pertinent to the industry,” said Brian Witt, chairman of ABA’s credit union committee. “It’s a cutting edge group simply for the fact that there isn’t another out there like it.” The 125-year old ABA has more than 50 committees representing various professions. Members of the CU committee, who are also members in good standing with the ABA, belong to three separate subcommittees – operations, supervision and electronic transactions. A number of industry heavyweights including Mary Dunn, CUNA associate general counsel and senior vice president of regulatory advocacy and Linda Dent, NAFCU’s director of regulatory compliance are members with both respectively serving on the supervision and operations committees. The group meets three times a year and had its latest confab in Los Angeles on April 3. There, private practitioners, in-house counsel, trade association attorneys and government attorneys were privy to a wide range of industry concerns including updates on new member business lending rules, compliance issues for overdraft programs, Small Business Administration loans and credit union trust companies. Equally pressing, were discussions on transition issues regarding the shifting of CUSO securities programs to credit unions and operational problems with VISA’s `Verified by VISA’ and `VISA Extras’ programs, Witt said. The committee has a number of long-term projects on the table including drafting a model loan participation agreement for credit unions and producing a nonprofit resource guide. The new guide ties into another long-term project that aims to provide legal services to new, start-up credit unions that typically have limited resources to obtain such services. JoAn Blackstone served as one of the earlier chairpersons of the committee and recalls the regulatory climate being almost identical to industry matters du jour. “Any additional powers credit unions sought, banking groups were there to pounce,” said Blackstone, who also served as in-house counsel for the California Credit Union League from 1975 to 1982 and is now in private practice. Blackstone said other issues the green committee submitted comment letters on included the effects of members bankruptcy on credit union operations, truth-in-lending and compliance and disclosure. Former CUNA Attorney Chuck Seibold, one of the founding members of ABA’s CU committee and current chair of the electronic transactions committee, also remembers one early bone of contention that pitted NCUA with the American Institute of Certified Public Accountants. NCUA had always considered share draft account as equities when it came to ledger recording but the AICPA deemed them liabilities, Seibold recalled. It took a few years to argue both sides but AICPA finally sided with NCUA’s description. “Credit unions have become so legally complicated, attorneys are involved all the time,” Seibold said, adding external factors such as compliance with the U.S. Patriot Act adds several legal layers that must be weighed. Witt said that while the committee increased membership by 10 percent in 2002, one goal is to elevate awareness of the group, which includes a publicity plan expected to roll out later this year. While the use of a listserve to share information is “very active,” Witt said the committee is researching better ways of delivery. In its 2002 council report to the ABA, the committee said the reestablishment of its membership committee will actively seek out new members, especially women and minority attorneys to increase diversity. The committee will meet at CUNA’s Annual Attorneys Conference on June 8 in Chicago and for the ABA’s annual meeting in San Francisco on Aug. 7. -