SALT LAKE CITY – Pressed by the banking lobby in a hotly-contested fight with credit unions, the Utah legislature moved ahead last week with its controversial anti-CU resolution asking Congress to look at taxing federal and state CUs and start scrutinizing NCUA rulings. On a 41-34 vote, the House adopted a slightly amended non-binding resolution pushed by House Majority Leader Rep. Jeff Alexander, a CU antagonist, asking Congress to "differentiate federal tax policy for traditional, small credit unions and larger financial institutions that compete with banks." On the strength of a vigorous "Stop Bank Attacks" e-mail and ad campaign to lawmakers by the Utah League of Credit Unions, House members softened the resolution's bite earlier in the week. Eliminated was language asking Congress to give states the ability to tax federally chartered credit unions and spelling out "exempt and non-exempt" institutions based on size, a point vigorously pushed by the banking lobby to single out what it calls the offending "mega" CUs. Both Salt Lake-based $2.8 billion America First FCU and the $1.3 billion Mountain America FCU have long been the chief targets of the UBA because of field of membership and business loan expansion. Leadership of the Utah League expressed disappointment at the House vote though warning that CUs remained the "underdog" in the contest with lawmakers influenced by a powerful banking lobby championed by Harris Simmons, chairman of Zions Bancorp, the state's largest who also is chairman-elect of the American Bankers Association. At one point during five days of wrangling over the resolution, procedural votes on the House floor nearly shelved the resolution after several lawmakers complained they were weary of the bank/CU clash and of picking sides among constituents "I do mind going to the mat over an issue that absolutely does not affect any policy change in Utah whatsoever," declared Rep. Susan Lawrence (R -East Millcreek) in comments appearing in Deseret News. "I resent being put in a position where I have to please half of my constituents at the expense of the other half, or vice versa, over an issue that has no effect on what happens in Utah. This will not change anything." But Rep. Stephen Urquhart (R-St. George) urged an up-or-down vote, saying lawmakers should not "punt" when confronted with divisive issues. Scott Simpson, president/CEO of the League, said he hoped the Senate will kill the resolution as it "takes a hard look" at the phony issues raised in the resolution and understand the motivation of bankers to destroy CUs. "It's a tough road in the Senate," said Simpson, a former chieftain for the Utah Republican Party before taking the League job more than a year ago. Howard Headlee, president of the UBA who during the week was outspoken in the Salt Lake media in blasting CU tactics in trying to defeat the resolution, called the League "deceptive" and accused it of "doing a phenomenal job of confusing their members." The League and their lobbyists, he continued, "will have to account for the deceptive message they conveyed to the public," charged Headlee. The House vote, he said, "is a positive step forward and we are looking forward in putting this behind us." During the floor debate, in one failed attempt to kill the bill, North Ogden Republican Rep. Glenn Donnelson tried to send the resolution back to the Rules Committee. "I call this the B&C waste bill. We've wasted a lot of time on banks and credit unions," Donnelson said. Early in the week, Democrats supporting the League were successful in getting a minority report amended to the resolution bill citing fallacies in the deliberations of the Financial Institution Task Force, which drafted the measure under the guidance of Rep. Alexander, the CU antagonist. Like the League, the Democrats on the Task Force itself charged the Task Force resolution was a "railroad" job of the banking lobby and a manufactured "crisis where none existed." The minority members complained that the Task Force acted without input from the NCUA much less the League or the UBA. Simpson said he wished the resolution a "speedy death" in the Senate and vowed to continue to urge credit union members to contact their legislators. "This is an unfortunate bill, and it's passing serves the very few at the expense of the many," Simpson told the Deseret News. "I believe many would like to see it go away." Early in the week, the League leadership was heartened by a 40-35 House vote which would have watered down the resolution slightly. Rep. Wayne Harper (R. West Jordan) said his intent was to "hone the resolution on the true facts and to remove statements and requests that are outside the review of Congress. The earlier version sought to determine whether NCUA rulings "were consistent with the original intent of the law and whether the economic circumstances have changed since the enactment of the Federal Credit Union Act" in such a way that that CUs retain broader powers. Simpson said the softened language was a positive step but that the overall outlook remained uncertain in the Senate. -

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