CUNA called the Clark language a ruse and the latest attempt by the ABA to sway lawmakers on the tax-exemption. Clark, a Republican from Santa Clara, Utah, is an aide to Harris Simmons, CEO of Zions Bancorp and the outgoing chairman of the ABA.

As part of its policy-making procedures and guidance for state lawmakers and staff, NCSL every three years acts on the so-called “dual charter” resolution impacting regulation of banks and CUs.

Resolution renewal has long been a lightning rod for the bank/CU fight, which was the case three years ago at NCSL's San Francisco convention.

For months, CUNA joined by the state league lobbying staff has been preparing for a banker attack at the NCSL with 40 CU representatives at the Nashville meeting held at the Gaylord Opryland Hotel.

The financial committee's 18-4 vote defeating the Clark policy amendment was likely to clear one last hurdle during the final days of the NCSL meeting late last week. Evidence of that, said CUNA, was unanimous approval of the 18-4 vote by a NCSL steering panel, which acted late Tuesday.

At the San Francisco conference, bankers tried unsuccessfully to win adoption of a similar tax-exemption resolution during floor debate on the last day of the high-level conference, which draws 6,000 lawmakers, their staffs, and outside lobbyists.

Larry Lanier, CUNA vice president of state governmental affairs, attributed the amendment's defeat in 2006 to “three years of advance work and a strong presence at the NCSL meeting by state credit union leagues and CUNA” in their advocacy role.

He said state leagues had stepped up their lobbying efforts with members of the Financial Services Committee, the NCSL Executive Committee and annual meeting attendees.

Commenting on the Clark amendment, which cites federal preemption on state taxes, John Magill, CUNA senior vice president of legislative affairs, said the banking lobby had “tried to use the federal preemption issue as a back-door vehicle to go after CUs' tax-exempt status employing a states' rights argument.”'

However, he said, “Clark was rebutted strongly by numerous state legislators who saw right through the rhetoric.”

During committee debate, two lawmakers, one from Iowa and another from Illinois, refuted Clark's arguments that his resolution did not impact the tax-exemption, but merely carves out new preemption guidelines. Issuing the challenge were Sen. Michael Grunstal, an Iowa Democrat, and Rep. Frank Mautino, an Illinois Republican.

Testifying for CUNA at the committee hearing was Lee Williams, president/CEO of Central Star CU, Wichita, Kan., who stressed the importance of the dual chartering system in strengthening CUs.

In her testimony, Williams, who also is CUNA's former chairman of the State Credit Union Subcommittee, pointed out the current NCSL dual chartering policy promotes the “competitive interplay” between NCUA and state regulators “to provide the best system of examination, supervision and regulation.”

“Having the choice of charters has allowed credit union volunteers and professionals to determine whether their credit union's membership would be better served by a state regulator legislature familiar with local concerns or by the multi-state operational advantages provided by a standardized nationwide structure,” said Williams

Also appearing before the panel was Gavin Gee, Idaho's top CU regulator who is director of that state's Financial Institutions Bureau.

Gee, in stressing the value of the state charter, warned that “when state laws, rules or policies disadvantage the state charter, there is a risk that those institutions will change to a federal charter, only feeding the trend towards federalization of financial services regulation.”

Gee also discussed current challenges facing the state CU system including state budget limitations, industry consolidation and regulatory burden. He encouraged the committee to renew the dual chartering policy arguing each state needs the support of its state legislatures to protect the viability of the state credit union charter.

“The financial services industry in every state is far too important to turn over to the exclusive jurisdiction of the federal government,” said Gee.

Gee's comments preceded the 18-4 vote of the committee vote as well as a discussion of a report issued earlier this year by a Kansas legislative agency critical of FOM expansion by CUs.

CUNA officials dismissed the Kansas discussion as inconsequential in relation to the 18-4 vote. Senator Ruth Teichman (R-Kan.), chair of the Financial Services Committee, had earlier told Credit Union Times the Kansas Legislative Post Audit report, as it is called, did highlight examples of large Kansas CUs reaching out “beyond their charters.”

Specifically, she referred to Boeing Wichita, the state's largest. The May report noted that “The Department of Credit Unions has allowed some credit unions to expand their fields of membership beyond what Kansas law appears to allow.”

CUNA officials noted that Sen. Teichman, who is chairman of the Kansas Senate's Financial Institutions Committee, was one of the 18 pro-CU votes in the committee.

Credit unions in that state have been on guard for months in preparation for possible new banker attacks when Earl McVicker, CEO of a Wichita bank and chairman-elect of ABA, takes over as chairman of ABA succeeding Simmons during the group's annual convention in Phoenix in October.