The first issue of Credit Union Times for the year means it is time once again to peer into the crystal ball for my annual credit union industry predictions for the next 12 months. No matter how credit unions are measured, impressive records will be achieved in virtually all significant categories as the year 2004 unfolds. These include huge membership increases, stepped up mortgage volume, expanded trust account services, and a substantial increase in member business loans. Also, watch for the number, type, and variety of FOM expansions to explode, a large growth in total assets, the introduction of many more new products and services, and the introduction of major improvements in technology. But there will be two exceptions to all these positive developments. The first one is obvious. The number of credit unions will continue to decrease significantly. There will be over 400 fewer credit unions by the end of the year due to mergers and liquidations. A high percentage of disappearing CUs will come from the declining ranks of small credit unions. But at least four mergers will involve good size CUs. The second exception is far more important. With ever-larger geographic fields of membership, the competitive rate differential gap continuing to close and a substantial increase in credit unions choosing to go the community charter route, overall member satisfaction will decline. Credit unions will continue to largely ignore this trend and thus do little if anything to halt or reverse it. After speculation run amok, an unknown Republican with no connections to credit unions will be nominated by President Bush for the NCUA Board position currently occupied by Chairman Dennis Dollar. Because of election year politicking, confirmation will drag on seemingly forever. After an additional five months as a lame duck, Dollar will reluctantly decide it is time to move on and set up his own private sector credit union consulting firm. Dollar will leave behind a two-person NCUA Board. Current NCUA Board Member and Vice Chair JoAnn Johnson will move up to the Chairman's position. There will be several one-to-one tie votes in NCUA Board meetings until it once again becomes a three-person board. Washington, D.C.-based Dollar and Associates will not be a longterm venture. Instead, it will position the popular chairman for eventual greener CU pastures. Unrelated Business Income Tax (UBIT) will capture more headlines next year, involve a total of at least 14 states, and consume a much greater portion of credit union industry human and financial resources. Typical of the slow-motion IRS, in the end nothing much will change. For the first time in the history of credit unions, it will take $1 billion to be listed in the top 100 credit unions based on assets. A total of 20 more CUs will join the billionaires' club. No new conversions from credit union to mutual thrift will occur in 2004. Because of state-level banker attacks and UBIT threats, the number of conversions from state to federal charters will increase significantly. The trend towards conversions to community charters will greatly accelerate. No large credit unions will join Patelco in converting to private insurance for their primary insurance coverage. As they did with what started out as a single sheet proposal but eventually passed into law as a voluminous document known as H.R 1151, banking lobbyists will swarm all over credit union specific proposed legislation already in the pipeline. They will not attempt to kill the legislative initiatives, but will seek ways to re-craft credit union proposals to fit their own goals. The nationally orchestrated state by state anti-credit union campaigns by the banking industry will be stepped up and involve approximately 17 states by year end. All banker attacks will fail after first appearing to succeed la the Utah scenario. The banking industry lawsuit against NCUA will also fail. The ABA will undergo a couple of important changes; one at the senior staff level and another in its governance structure. At the state level, the outspoken head of the Utah Bankers Association, Howard Headlee, will meet the same fate as Scott Earl, former CEO of the Utah Credit Union League proving again that when the team doesn't win it's the coach who gets fired. The choice for the new NASCUS CEO to replace booted Doug Duerr will be a big surprise. (Hidden agenda?) It will be followed by two important staff changes in short order. Over at CUNA, there will be a major surprise announcement concerning senior staffing within the first half of the year. One more time, bankruptcy reform, despite another big increase in personal bankruptcies throughout the year, will again be a priority for credit union lobbyists. And once again it will not pass. Credit union CEOs near retirement age will orchestrate at least four good-size mergers, finishing their careers as highly compensated EVPs with very light workloads. In the bad news department, robberies will increase dramatically and they will be more violent. The numbers for white collar crime will also go up and the dollar amounts involved per incident will be record setting. More than two dozen vendors will debut as advertisers in the pages of this publication as further evidence that credit unions have emerged as a potentially profitable market for suppliers who once thought all the action was with banks. CUNA's Future Forum in Hawaii will attract a record crowd (mostly volunteers) making it the best attended credit union conference of the year. Finally, in the slam dunk predictions arena, at least six more high-profile credit union CEOs will find out the hard way that their fate is in the hands of their volunteer boards as they unexpectedly join the ranks of the unemployed. However, no board members will be fired. Check back in December to see if this year's crystal ball is in good working order. Happy New Year!