"I think you could say we helped spur the communication and the conversations as we provided an impetus to people to speak out more freely about how the NCUA acts," said Karnes, acknowledging that the petition drive has run its course. 

But the complaints it generated from CU leaders forced the NCUA "to acknowledge the grassroots efforts out there," maintained Karnes.

Last April and acting separately, a Knoxville-area committee of CU executives echoed the Karnes theme with its own "Declaration of Grievances," which was harshly critical of NCUA policies and called for change by lobbying Congress for swift action to prevent "catastrophe" to the industry.

The Knoxville group started with 45 signatories and today has 91, said its coordinator, David W. Proffitt of Alcoa, Tenn.  He said that  CU executives have signed on from across the South and Midwest. They have included CEOs on the board of Louisiana Corporate Credit Union now undertaking a planned merger with Alabama's Corporate America CU pending with the NCUA.

"We think the leadership at NCUA appears to be more entrenched than ever in creating regulatory burdens for credit unions, and I point most recently to Chairman Matz's praise of the Consumer Financial Protection Bureau statements," said Proffitt, who is CEO of the $169 million Alcoa Tenn FCU. 

CU members are ill-served by NCUA policies, said Proffitt, noting that many in the Knoxville group are now getting behind the proposal by Chip Filson of Callahan & Associates who advocated a breakup of the NCUA with a separate Office of Credit Union Administration under the Treasury Department similar to national banks' Office of the Comptroller.

Filson suggested a new "cooperative insurance and collective capital organization" funded with CU deposits but managed by a board with both regulatory and industry representatives. He also advocated a coop-owned central liquidity facility set up "similar to that of the Federal Home Loan Bank system."

"We are hoping his proposal will take on some momentum once the credit union movement begins to learn of it," said Proffitt. The "new vision and blueprint is such a fresh and common-sense solution to the credit union industry ills."

In its grassroots advocacy and seven-page Declaration of Grievances, the Proffitt group has long argued the corporate losses should not be foisted on individual CUs and their members when the "NCUA was the responsible agency." 

Moreover, "the treatment given by NCUA toward credit unions through this ordeal has been a tidal wave of NCUA directives, regulations and fee assessments that is draining our member taxpayer assets and income to operate and grow. This must be stopped," urged the Tennessee committee.

Proffitt said the group remains realistic about challenging NCUA policies but still hopes to gain more lawmaker support since it recognizes the difficulty in getting the NCUA to change on its own.

Still, the agency acts overly "legalistic and is unsympathetic to real business issues affecting the growth of credit unions or our members' money," charged Proffitt.

The NCUA has remained publicly and mostly mum on the Karnes-Proffitt groups, but last week it said it "appreciates the feedback it receives" as the agency "works to engage many audiences."

"Such two-way communication is effective in regulating credit unions and protecting the safety and soundness of the system," said an agency spokesman. 

Nonetheless, on the assessments, Proffitt like others have been outspoken that "ten years of assessments must go away and are not needed or required." Moreover, while there are "too many accounting gimmicks taking place now over the assessments, those practices hurt the credibility of historical accounting standards that have made credit unions safe and sound institutions."

For his part, Karnes said his petition fostered new channels of industry dialogue and for better or worse that would include the NCUA's new regulation on CUSOs. Whether the oversight is warranted or unwarranted, it has generated a topic for discussion, he said.

Karnes said there is also new debate under way on the NCUA's assessment prepayment and its impact  on the  bailout conversation following the agency's decision last Tuesday to call off the assessment plan for now.