The most recent and General Accounting Office (GAO) report on credit unions, like most GAO reports, turns out to be a mixed bag-a common characteristic of such reports, of which several are issued every day here in Washington and on virtually every subject under the sun. One overriding aspect of the report cannot, however, be overlooked-the ever increasing safety and soundness of our industry. To put the report in perspective and in the context of other GAO reports, it must be noted that the GAO, which has been around since 1921, typically issues over 1,000 reports a year, and its officials appear before Congress roughly 200 times a year in support of their work. There have, however, only been only two comprehensive GAO reports on credit unions. The first was required as part of the S&L bailout legislation and released in July 1991. The second, of course, was released just last month. The 1991 report, “Credit Unions: Reforms for Ensuring Future Soundness,” runs 371 pages and contains more than 50 recommendations, including: 1) writing off the 1% deposit federally insured credit unions have with NCUSIF, 2) expanding the NCUA Board to five seats, and 3) eliminating the CLF. The most recent report, “Credit Unions: Financial Condition Has Improved, but Opportunities Exist to Enhance Oversight and Share Insurance Management,” at 174 pages, is just over half as long as the first and, most notably, contains less than 10 recommendations. The 1991 report, while noting the “collapse of the thrift industry” and the “financial distress of commercial banks and pressure on its insurance fund,” found that “credit unions [in 1991] are in a relatively favorable financial position.on average, they are relatively well capitalized, profitable, and liquid.” In its most recent report, the GAO states, “The overall financial condition of the credit union industry, as measured by capital ratios, asset growth, and regulatory ratings, has improved since our last report ..” In addition, in the 1991 report, the GAO noted a “significant decline in recent years [1985 to 1990] in the number of low net worth credit unions and in their market share.” What is GAO's assessment today? According to the latest report, “since 1991 there has been a significant drop in the number of problem credit unions as measured by regulatory ratings.” The ever-improving financial condition of our industry and our enviable safety and soundness record, whether over the past decade or since the passage of the Federal Credit Union Act in 1934, have not occurred in a static environment. Simply stated, the evolving financial industry in which credit unions must thrive and compete continues to develop and change, at an increasing pace. Nevertheless, credit unions remain by definition institutions that are: organized and operated for mutual purposes without profit; do not issue capital stock; are principally governed by volunteer boards; and have fields of membership. As such, our industry remains as unique and vital today as it was in 1934. The assertion in the latest GAO report that credit unions are becoming more bank-like is, therefore, without merit, and I remain unconvinced that there needs to be any additional data collection in relation to serving low-income members in underserved areas. While although, the one-page summary in the “highlights” that precedes the body of the GAO report is also somewhat troubling because it states that, “recent legislative and regulatory changes have blurred some distinctions between credit unions and other depository institutions such as banks,” it is important to note that the body of the report itself states, “Credit unions continue to differ from other depository institutions because of their cooperative structure” and “.credit unions are member-owned cooperatives run by boards elected by their members.” What is remarkable to me is that in an increasingly homogenized financial marketplace, replete with cyclical scandals and periodic assaults on public confidence, credit unions not only remain viable and flourish, but that they also further distinguish themselves from other financial service providers. That is why credit union leaders visit their legislators-to ensure their legislators are aware of and fully appreciate the characteristics that clearly set credit unions apart from other financial institutions. When it comes right down to it, the most important part of the report was not written by GAO but by NCUA Chairman Dennis Dollar. The GAO customarily provides an opportunity for rebuttal and comments by those entities that are its prime focus. Thus, a six-page letter from NCUA's chairman to GAO is included in an appendix. In disagreeing with the GAO's recommendations for more data collection, Chairman Dollar comments that such a recommendation, if implemented, would “impose significant and unnecessary data collection and reporting burdens on credit unions and would be especially problematic and burdensome to small credit unions.” Over 50% of credit unions that take on underserved areas have less than $50 million in assets. One would, therefore, have to seriously question why anyone would recommend increasing the regulatory burden on these small institutions who are striving to serve their members and compete in today's financial marketplace. In the end, some recommendations from this report may be implemented and some may not-an everyday result here in Washington. The fact that the GAO pulls no punches-it has produced stinging assessments of the bank and thrift industries in the past-only accentuates its analysis and conclusions on credit unions' exemplary safety and soundness record. We may disagree with the assessment of the GAO staff in some areas, but we have always found them to be professionals, giving NAFCU and the credit union industry the full and fair opportunity to present its case. The decisions on any recommendations lie ultimately not with the GAO, but with NCUA and Congress, and credit unions have never been shy in presenting persuasive cases in either arena. Should the banks use parts of the report out of context, we will do as we always do-fill in the picture.