The long-simmering feud between the Hatfields and the McCoys . . . excuse me, the Utah banks and credit unions, is threatening to boil over again in the current legislative session as the Utah League of Credit Unions readies two bills it hopes will unlock the alleged shackles placed on its member institutions two years ago.
The League is preparing the bills for presentation later in the session, according to Scott Earl, president of the Utah League of Credit Unions. One of them, sponsored by Sen. Terry Spencer, R-Layton, would permit credit unions to make larger business loans to its members than is now allowed by state law. The other, sponsored by Sen. Michael G. Waddoups, R-Bennion, would change current law restricting the geographic limits in which credit unions may expand.
Earl said the bills will attempt to undo credit union restrictions contained in SB237, "The Credit Union Access Act," that became law in 1999 following emotional lobbying campaigns by both sides.
Earl said in February 1999 that SB237 wasn't a perfect fit for the state's credit unions, but he applauded senators, especially the bill's sponsor, Sen. Al Mansell, R-Sandy, (now president of the Senate) for tackling a difficult, complex issue and producing a balanced and fair compromise.
But, in truth, neither Earl nor credit union executives liked the bill, saying it restricted their growth, especially the growth of the big credit unions such as America First and Mountain America. Gov. Mike Leavitt's signature was barely dry on the new act before the credit unions began mapping a campaign to change it.
That effort included attempts to elect legislators favorable to their cause, and in that they were partially successful. New Republican Reps. Paul Ray, Douglas Aagard and Peggy Wallace all work for America First.
"We were involved in a lot of races," said Earl. "We stepped up and tried to get more involved in the political process. We learned in 1999 that you need to develop relationships with legislators to gain their trust and that's what we're trying to do."
But Howard Headlee, president of the Utah Bankers Association, views the League's attempts to "gain trust" as nothing more than a move to pack the Legislature with their own people.
"It's about as blatant an attempt at power politics as I've seen," said Headlee. "They pour $200,000 into campaigns and get three America First employees elected to office, then try to push through bills that would advantage America First."
Clearly, there is no love lost between these two financial giants despite declarations in 1999 that they had buried the hatchet.
As for the existing bill, the bankers say they can live with it even though, according to Headlee, "we probably gave away too much." That means the attempts to amend it will have to come from the credit union side, which also believes it gave away too much in the '99 bill.
"We think there are some long-term implications in it that were not intended by the Legislature," said Earl. "One of the things you may hear (from the bankers) is that we agreed in 1999 that we would never come back. That was not my belief then and it isn't now. We were put in a position where we had to have something out of the Legislature, and there was tremendous political pressure on both sides to compromise. It solved the problem at the time, but that's not the best way to make long-term laws."
For now, said Earl, the two bills are still being worked on, and he isn't sure when they will be introduced in the session. "They're not in a presentable form at this point," he said.
Presentable or not, Headlee believes that if and when they are introduced, they will be met with indifference by the Legislature.
What he didn't say is that Senate President Mansell, the existing bill's author, and House Speaker Marty Stephens, R-Farr West, an employee of Zions Bank, may not view credit union complaints as a top priority.
If the credit union bills are introduced, Headlee says the UBA will fight them, but he doubts it will be as dramatic as 1999. "They don't have a case and the legislators don't want another bloodbath."
E-MAIL: max@desnews.com