Now that the NCUA is involved in the suit, it could take a turn in a different direction. Stay tuned, but I think this could blow right over for CUNA and Cheney, who wasn't even on the board of WesCorp at the time of conservatorship. Either way, in the long run, it won't be a huge deal for either.

On the other hand Corporate America's lawsuit on securities violations against U.S. Central executive and directors, of which Cheney was one at the time of conservatorship, is going to trial. It could be problematic if the judge rules in favor of the plaintiffs. A risk the executive committee apparently felt was outweighed by the benefits.

And, according to the California league's 2008 990, revenues dropped from $16.7 million the previous year to $10.3 million, while assets plummeted by $5 million. At the same time, while its members were dealing with one of the roughest economic recession in the entire country, the league cut expenses from $16.5 million to $14 million. On a related note, CUNA's financial status should improve in the future now that it's completely depleted its U.S. Central investment.

Additionally, Cheney had previously served on the NAFCU Board as well as CEO of Xerox FCU. This should do one of two things: either get CUNA and NAFCU making nice with each other or pave the way to some sort of combination. He said he personally believes over time it would be beneficial to credit unions if the industry spoke with one voice in Washington, but it's up to the credit unions to decide.

From my dealings with Bill Cheney, he seems very even tempered, which is just the level-headed image CUNA needs to portray while making its arguments to policymakers.

Cheney is well-versed on the myriad issues circling over Washington. At the same time his new position was announced, members of Congress were tinkering with regulatory restructuring, which raised several red flags for credit unions. The Senate approved an amendment removing language that would have required financial institutions to report to the CFPB the number and dollar amount of deposits by census tract and other demographics.

Several other amendments were pending but had not gotten an up or down vote as of press time. One such amendment would subject credit unions over $1 billion that offer student loans subject to direct Consumer Financial Protection Bureau oversight. It's a bad idea that would raise regulatory burden on credit unions after Congress already eliminated the Federal Family Education Loan Program. This provision would lead to even greater tightening of student lending as school costs continue to skyrocket.

Another amendment would cap ATM fees at 50 cents, but CUNA and NAFCU argued that those fees are imposed to cover maintenance and operational costs of running those machines.

On a D.C. side note, congratulations to Larry Blanchard on his induction into the Cooperative Development Foundation Hall of Fame at the National Press Club last week.

Over the Potomac River to Alexandria, Va., where the NCUA seems to be taking a command-and-control approach. Alonzo Swann was promptly removed from his post as NCUA's Region III director just prior to what some have termed a surprise failure of the $250 million St. Paul Croatian Federal Credit Union. The credit union was not really on anyone's radar when the NCUA originally announced its conservatorship; a look at its financial performance report shows that the books weren't kept all that up to date. The Cleveland credit union reported no delinquencies through all of 2009-that would have had to been miraculous. There can't be any excuse for that not being noticed. As of March, the books show delinquent loans to net worth at 32.87%.

The agency is shifting to more public enforcement actions against credit unions, which while not good for the institution in trouble, is better for the entire industry in the long run. The NCUA issued a letter of understanding and agreement against Tremont Credit Union, together with the Massachusetts Division of Banks. The NCUA only issued one public LUA since 2006. Tremont was the second in two weeks.

–Comments? Email [email protected]