News Now Archive

Filed on May 27, 2005–May 29, 2005, published the first business day after.

• Inside Washington
• CUNA: Record profits underscore bank hypocrisy
• N.C. Senate OKs fin-ed bill, league to train CUs
• Hoekstra to Mich. CUs: Stay vigilant on taxation
• California elder-abuse-reporting bill advances
• Schieffer named interim CEO at SunCorp
• Blaine to debate on CU-to-thrift conversions
• NCUF calls for Wegner Award nominations
• Corporate One reaches $3 billion in assets
• Georgia CUs top $1.1 million in CMN contributions
• Market News
• News of the Competition
• Thieves stealing car identities
• Products and Services briefs
• CUSCAL: Access to member lists prompt takeovers

Inside Washington

• WASHINGTON (5/31/05)--House Financial Services Committee Chairman Mike Oxley (R-Ohio) and Ranking Member Barney Frank (D-Mass.) introduced legislation Thursday that would allow banks to enter the real estate business, according to the American Banker (May 27). The National Association of Realtors has rejected any attempt at banks entering the business. It contends that the real estate services are not financial activities, and that regulators should not allow banks to engage in them...

• ALEXANDRIA, Va. (5/31/05)--The National Credit Union Administration (NCUA) has scheduled a Small Credit Union Workshop at the First Baptist Church in East Emhurst, N.Y. on June 25. The free workshop will address Individual Development Accounts and compliance issues related to the Bank Secrecy Act. Visit NCUA's website for more information...

• WASHINGTON (5/31/05)--State law enforcement, regulatory and consumer protection advocates say stronger state laws are needed to address the widespread problem of scams in which "foreclosure rescue" specialists promise to help consumers avoid foreclosure but fail to deliver, and sometimes take the deeds, according to the American Banker (May 27). A handful of states already have passed legislation to deal with the problem and the New York Legislature held a hearing on the matter last week. In a common example of the scam, the con artist persuades the victim to temporarily sign over the deed to an "investor," who will purportedly help the homeowner get back on track with payments for a year and then give the deed back. The scammers then take the house, refinance it with a larger mortgage, pocket the profits, and eventually evict the homeowner. Or the con artist might string the homeowner along, while charging thousands of dollars in fees and promising to get the homeowner out of the foreclosure process, and then claim that such a rescue proved impossible...

CUNA: Record profits underscore bank hypocrisy

WASHINGTON (5/31/05)--It never has been as lucrative as it is right now to be a banker--or to be as hypocritical, said the Credit Union National Association (CUNA) after commercial banks and savings institutions reported another quarter of record profits.

Commercial banks and savings institutions insured by the Federal Deposit Insurance Corp. (FDIC) Thursday reported net income of $34.3 billion for the first quarter of 2005, eclipsing the previous quarterly record of $32.4 billion set in the third quarter of 2004.

In light of the FDIC report, CUNA President/CEO Dan Mica said, "It has never been as lucrative as it is right now to be a banker, or to hold as powerful a position in the financial services marketplace--or to be as hypocritical."

Mica pointed out that bankers continue to oppose any legislation that will modernize credit union service to members--specifically the Credit Union Regulatory Improvements Act (CURIA, H.R. 2317). All the while, he said, bankers are pushing for legislation that will provide them billions in tax relief.

One such bill, The Community Banks Serving Their Communities First Act of 2005, was introduced by U.S. Rep. Jim Ryun (R-Kan.) on May 4. CUNA does not oppose this bill.

Commercial banks and savings institutions' first-quarter profits represented a 7.7% improvement over the industry's year-earlier results. The FDIC said the positive effects of reduced expenses for bad loans and the absence of significant merger-related costs were major factors in the industry's earnings surge.

Aside from the record quarterly profits, the FDIC numbers also show bank and thrift assets grew by $178 billion in the first quarter of 2005, Mica pointed out. "If the banks continue that rate of growth for the remaining three quarters of the year, their assets will have grown by an amount greater (by $44 billion) than all the assets of credit unions at the end of 2004!"

In the 12 months ending March 31, the FDIC said deposits at insured banks and thrifts grew by $581.2 billion (9.5%). By contrast, total assets of all U.S. credit unions were $684 billion as of March 31.

"And still, bankers express their "concern" about the growth of credit unions," said Mica. "What concern of the bankers could possibly be justified in light of their fat profits and overwhelming growth?"

Use the resource link below to learn more about CURIA and bankers attacks against credit unions.

Resource Links

CURIA, H.R. 2317

BANK ATTACKS: CUs Fight Back!

N.C. Senate OKs fin-ed bill, league to train CUs

GREENSBORO, N.C. (5/31/05)--The North Carolina Senate approved a measure last week to make financial education mandatory in the curriculum of the state's high schools.

The measure is similar, but not identical to, legislation that has already passed the House. HB 16, School Curriculum Shall Include Financial Literacy, was approved unanimously by the House on May 10.

The North Carolina Credit Union League (NCCUL) "is actively supporting efforts in both the House and the Senate to make financial education a part of the required curriculum in our high schools," said Dan Schline, vice president of governmental/regulatory affairs at the league. "Understanding the basics of personal finance is a life skill that we don't want to see young people in North Carolina go without," he added.

State Treasurer Richard Moore testified on behalf of the Senate bill during a committee hearing Wednesday. "More children leave college today because of bad credit that they do because of bad grades," he said. "If that doesn't get your attention, I don't know what will."

The league has added a staff position dedicated to financial education. Ed Agnoli joined the league May 16 to provide training and other resources to credit unions across the state. A former middle school teacher in Stokes County, Agnoli will work with credit unions to promote financial literacy across the state.

Kim Bohannon, the league's assistant vice president of compliance/regulatory services, noted that "credit unions are uniquely positioned to provide financial education to North Carolinians. We want to provide North Carolina credit unions with as many resources as we can to assist them with this effort."

League President John Radebaugh said the league has "created valuable partnerships with agencies such as the State Treasurer's Office, NC $aves, the Cooperative Extension Service and NC Jump$tart, and we thought it was time to dedicate a full-time staff member to this area."

Hoekstra to Mich. CUs: Stay vigilant on taxation

NORTHVILLE TOWNSHIP, Mich. (5/31/05)--U.S. Rep. Pete Hoekstra (R-Mich.) thanked Michigan's credit unions for their support of the bankruptcy reform bill but warned they must stay involved in the political process and remain vigilant on taxation.

He made the comments while addressing the Michigan Credit Union League's 71st Annual Membership Meeting May 21. (Michigan Monitor May 30). Hoekstra, chairman of the U.S. House Permanent Select Committee on Intelligence, spoke about the role of intelligence in the war on terror, proposals to reform the Social Security system; and the recent passage of the bankruptcy reform law, which President Bush signed into law on April 20.

The bankruptcy reform law would not have been possible without the steadfast support of the nation's credit unions, he said. "I want to thank you for your patience: After eight years, we have finally passed bankruptcy reform, and if you hadn't been there, it would not have happened," he told attendees.

"When people abuse the bankruptcy system, it isn't the wealthy who are hurt--it's other consumers who are trying to apply for a loan or lower the rate on their mortgage."

On the credit union taxation issue, Hoekstra urged credit unions to stay involved in the legislative process. "I don't think there's a movement in the House or the Senate to tax credit unions, but you need to watch us and stay vigilant," he cautioned.

He painted a positive outlook for credit union regulatory reform. "I think there is a good opportunity in the next year to pass regulatory reform, and I would urge you to show the same patience and persistence that you showed in the bankruptcy reform effort."

Also speaking was Dick Ensweiler, chairman of the Credit Union National Association (CUNA) and president/CEO of the Texas Credit Union League, who emphasized the need for credit union regulatory reform as contained in the Credit Union Regulatory Improvement Act (CURIA).

Ensweiler noted in particular the need to lower credit union reserve requirements to a level compatible with other financial institutions and to scrap the 15% cap on member business loans, first imposed as part of the Credit Union Membership Access Act of 1998.

"Many of our members today are starting small family businesses, and we need to have this cap eliminated or increased so that we can continue to help our members," Ensweiler said.

California elder-abuse-reporting bill advances

SACRAMENTO, Calif. (5/31/05)--The California Senate Thursday passed a bill requiring employees of financial institutions to report suspected financial abuse of the elderly ( The Oakland Tribune May 27).

SB 1018, sponsored by state Sen. Joe Simitian (D-Palo Alto), passed 24-24 and is on its way to the state Assembly. Several similar bills are making their way through the state legislature. Simitian's bill is one of the most stringent, requiring bank and credit union employees to report suspicious behavior or face penalties.

So far, only nurses, police officers, clergy, and animal-control officers are required to report abuse.

The California Credit Union League is working toward softening the requirements since many young credit union and bank tellers are not trained to recognize elderly abuse. The league and the California Bankers Association favor language that would require elder-abuse training but not mandated reporting.

Earlier, John Van Etten, the league's legislative lobbyist for state governmental affairs, told News Now that the league is working to temper the language because 18- or 19-year-old tellers processing complex financial transactions in only a minute or two and elderly abuse is a complicated and delicate matter not easily recognizable.

Simitian was critical of financial institutions' stance, saying "California banks and credit unions continue to take a 'see no evil, hear no evil, speak no evil' approach to elder financial abuse."

Schieffer named interim CEO at SunCorp

ARVADA, Colo. (5/31/05)--Mark Schieffer, a senior vice president with SunCorp Corporate Credit Union, has been appointed interim president/CEO of the corporate. As of Wednesday, May 25, Eric Kenealy is no longer in that position, announced Board President Darin Moody, president/CEO of Utah First FCU, Salt Lake City.

Schieffer, who was senior vice president, investments/chief investment officer, joined SunCorp Oct. 28, 2004. Before joining SunCorp, he was director of Advisory Services for ALM First Financial Advisors in Dallas, Texas. He also has served as an investment manager for Southwest Corporate FCU and securities administrator at U.S. Central Credit Union.

Kenealy, whose credit union career spans 23 years, had been with SunCorp for five years, joining SunCorp in 2000, said Ed Beckmann, vice president of marketing and public relations.

"There was no evidence of fraud or misappropriation of funds related to this transition," Beckmann told News Now. A search committee has been formed to identify a permanent replacement.

Blaine to debate on CU-to-thrift conversions

WASHINGTON (5/31/05)--A formal debate on whether a credit union's membership can benefit from a conversion to a mutual thrift will be held July 11 in Arlington, Va., sponsored by the Metropolitan Area Credit Union Management Association (MACUMA), based in Washington, D.C.

Debators will be Jim Blaine, the president of North Carolina State Employees' CU, based in Raleigh, N.C., and Richard Garabedian, an expert on conversions with the Washington law firm, Luse Gorman Pomerenk and Schick, PC.

The topic is timely, with several high-profile attempts by credit unions to convert to mutual savings banks this year.

MACUMA Executive Director Connie Hackney describes the event as "a natural extension of the association's commitment to elevating important credit union matters to public conversations."

Blaine recently appeared on a segment about payday lending on "60 Minutes" and has worked with member groups opposing conversions.

NCUF calls for Wegner Award nominations

MADISON, Wis. (5/31/05)--The National Credit Union Foundation (NCUF) is calling for nominations for the 18th Annual Herb Wegner Memorial Awards. Deadline for nominations is June 27.

The awards are the credit union movement's highest honor, recognizing individual, organizational and lifetime achievement by credit union supporters dedicated to NCUF's mission of promoting and improving consumer financial independence through credit unions.

Categories include:

• The Individual Achievement Award, honoring an unsung hero for innovative concepts and accomplishments related to one specific identifiable category. Although nominees may or may not be recognized on a national scale, they have made a significant contribution to their community and the progress of the credit union movement.

• The Outstanding Organization/Program Award, honoring an organization or business for innovative concepts or products/services that make a significant impact on the national or international credit union movement with measured results.

• The Lifetime Achievement Award, honoring an individual who has dedicated his life to promoting the credit union philosophy, created innovative concepts, and provided leadership having a significant and lasting impact on the national and international credit union movement.

Nominations can be made by individuals and/or organizations. Send a completed nomination form and three to six letters of recommendation to NCUF. NCUF will then send the nominee a nomination questionnaire.

The awards will be presented at the 18th Annual Herb Wegner Memorial Awards Dinner Feb. 26 in Washington, D.C.

For more information, use the resource link or contact Kris Hoffman, manager of donor relations, at 608-231-4397 or khoffman@ncuf.coop.

Resource Links

Herb Wegner Memorial Awards nomination form

Corporate One reaches $3 billion in assets

COLUMBUS, Ohio (5/31/05)--Corporate One FCU reached $3 billion in on-balance-sheet assets during April, for the first time in its history.

The driving factor was term certificate balances, which were up 38% over April 2004.

The milestone marks a growth trend for Corporate One. The corporate grew to the sixth-largest corporate credit union, from the ninth-largest position, according to year-end data from Callahan & Associates.

While some corporates experienced decreases in member deposits during 2004, Corporate One's mix of investments and rates, along with a national marketing effort, translated into 23 new investment relationships since the beginning of the year. Part of the growth was due to an increase in "reverse inquiries," or customized investments requested by credit unions to meet a specific need.

"Almost daily, we are getting requests from our members to structure investments or loans to meet a specific need," said Tammy Cantrell, senior vice president of asset/liability management at Corporate One. "These structures are helping our members maximize their investment returns or mitigate interest-rate risk."

The corporate manages another $693 million in outstanding certificates of deposit (CD) it has sold through SimpliCD, a CD program owned by 29 corporate credit unions and U.S. Central Credit Union. Corporate One also manages $307 million in securities outstanding, bringing its total assets under management to more than $4 billion.

Georgia CUs top $1.1 million in CMN contributions

DULUTH, Ga. (5/31/05)--Georgia credit unions have contributed more than $1.1 million to Children's Miracle Network (CMN) "Credit Unions for Kids" since the program began in the state in 1998.

The announcement was made at an awards ceremony of the 71st Georgia Credit Union Affiliates' Annual Meeting and Convention May 20 in Savannah.

The million-dollar milestone was reached in 2004, when 49 credit unions and other support organizations participated in fundraising efforts to raise a one-year total of $228,518, which was an all-time high.

Georgia's credit unions used a variety of ways to raise funds--from selling paper balloons or candy, to casual-dress days, to bowl-a-thons. Georgia has six CMN hospitals. Proceeds raised for CMN are donated to the hospitals to help children who are dealing with illnesses or injuries and their families.

The league's annual convention awards ceremony recognized all credit unions that participated and the top fundraisers.

Market News

MADISON, Wis. (5/31/05)

• The Federal Reserve will continue raising interest rates, say Fed officials. In a speech in Paris, Fed. Gov. Edward Gramlich said the central bank will continue to boost rates at a gradual pace. "It doesn't look like much of the oil price increase has passed on into the inflation stream," said Gramlich, who plans to resign from the central bank in August. Similarly, Chicago Fed President Michael Moskow told an arbitrators conference last week that the Fed will keep raising rates "at a measured pace." The fed funds rate is now 3%--up 100 basis points from June 2004, when the central bank began raising rates. But longer-term market rates have declined sharply since the Fed began tightening monetary policy--a situation that Fed Chairman Alan Greenspan has called a "conundrum." The 10-year Treasury yield is now at 4.08%--down 62 basis points from 4.70% in June 2004. Mortgage rates have fallen in tandem--buoying speculative buying and prompting concerns about a possible housing bubble. However, an increase in speculative buying typically foretells the end of rising prices, said Fed Gov. Susan Bies. "At some point we do believe that the 10-year Treasury (note yield) will rise above 4% and take mortgage rates with it," Bies told reporters following a speech to a Women in Housing and Finance event in Washington, D.C., last week (Reuters via The New York Times May 27) ...

• Consumer income accelerated last month while spending posted a smaller gain, according to a Commerce Department report. Personal income rose by 0.7% in April following a 0.5% increase the previous month. Personal consumption rose 0.6% after a 0.9% gain. Although spending growth remained strong last month, price increases largely drove the gain. Real spending rose 0.2% in April--the smallest increase since January. Rising energy prices continued to weaken consumer confidence this month, according to another report. The University of Michigan's consumer sentiment index fell to 86.9 in May--from an 87.7 reading in April and the lowest level in two years. However, consumer sentiment may improve going forward because energy prices eased during the second half of May (Bloomberg.com and Associated Press May 27) ...

• The downgrades of General Motors (GM) and Ford Motor stock by ratings agencies already has affected the junk-bond market. According to Arcata, Calif.-based AMG Data Services, investors have withdrawn $7.31 billion from mutual funds that invest in junk bonds since March 1. That impact may increase in the weeks ahead, since GM and Ford will officially fall to junk-bond status on June 1, according to the Lehman U.S. Aggregate Index. Fund managers who are required to place funds in investment-grade bonds are expected to sell GM and Ford. But while the automakers' bonds have stronger ratings than most junk bonds, they pay higher yields. And that wider spread could make them attractive to investors. For example, GM's 30-year bond pays a yield that is about 6.70 percentage points higher than Treasury bonds. That's much higher than the average high-yield bond's 4.10 percentage-point spread (The Wall Street Journal Online May 27) ...

• Ford Motor Credit Co. announced Friday that it has received approval to enter the auto-financing market in China. Ford Motor's finance unit said it will begin offering auto financing to Ford dealers later this year, then expand into financing other dealers' brands and perhaps into consumer installment loans. General Motors' GMAC Corp. finance unit was the first foreign firm to receive approval to enter the Chinese market. GMAC launched a joint partnership with Shanghai Automotive Industry Corp. But while lucrative, the Chinese auto market will be a challenge to the U.S. units. Many buyers in China still make auto purchases in cash, and the government imposes stiff restrictions on vehicle loans. Lenders' total guaranteed loans may not top 200% of their registered capital. And staff must have work experience or an education in finance (Associated Press via The New York Times May 27) ...

• Many workers in the U.S. sacrifice their vacation days each year, according to two polls. In a survey conducted by Harris Interactive for the online travel site Expedia, 31% of respondents said they don't take all their vacation days. Another survey, conducted by SurveySpot for Universal Orlando Resort, found that 50% of full-time employees don't take all their paid time off. According to the two polls, Americans forfeit three to eight days of vacation on average each year. Workers often fear losing their jobs if they take all their days off, or they feel they simply have too much work to do. Universal Orlando also sponsored a study to determine how the trend varies by region. Using Labor Department and Census Bureau data, the study found that employees in Sacramento, Calif., were the most likely to take all their vacation days. Workers in Newark, N.J., were the most likely to fork over their days. The study didn't determine the reason for the regional differences. However, differences in local unemployment rates, industries and lifestyles probably explain the disparities (MarketWatch May 27) ...

News of the Competition

MADISON, Wis. (5/31/05)

• Former Riggs Bank vice president Simon Kareri and his wife, Ndeye Nene Fall Kareri, were arrested last week on charges of bank fraud, wire fraud, conspiracy and money laundering, according to Channing Phillips, a spokesman for the U.S. Attorney's office for the District of Columbia. He said the charges were connected to Riggs' dealing with Equatorial Guinea. The Washington Post, which reported the arrests, said the two were the only people to be arrested in the investigation of Riggs. The Washington bank, known as the bank of diplomats and presidents, pleaded guilty to a criminal violation of the Bank Secrecy Act in January. Riggs agreed to pay $16 million for failing to report suspicious activity in accounts held by officials of Equatorial Guinea and former Chilean dictator Gen. Augusto Pinochet (Reuters via The New York Times May 27) ...

• New York Attorney General Eliot Spitzer and New York Insurance Superintendent Howard Mills have filed a civil lawsuit against American International Group (AIG); Maurice Greenburg, the company's former CEO; and Howard Smith, its former chief financial officer. The suit accuses Greenburg and Smith of participating in fraudulent business schemes to inflate the firm's business and boost its stock price. In another legal action, Ohio Attorney General Jim Petro filed a lawsuit against Greenburg to reverse his transfer of 41 million shares of AIG stock to his wife, Corinne Greenburg. The shares are worth more than $2.6 billion. AIG, the world's largest insurer by market value, has admitted to overstating its income, disguising losses, and overvaluing its assets. The company said earlier this month that it plans to restate its financial results for the last five years. The move would cut its net worth by $2.7 billion (Reuters via The New York Times May 27) ...

• Tax preparation firm H&R Block said in a filing with the Securities and Exchange Commission that a federal court for the Northern District of Illinois has denied its proposed $360 million settlement of a 1998 class-action suit related to loans given in anticipation of tax refunds. H&R Block and HSBC Taxpayer Financial Services, a unit of Britain's HSBC Holdings Plc, agreed to the settlement in early May. The settlement would have covered more than 55 million refund-anticipation loan transactions and 28 million consumers. The judge's action means each party will return to the same status as if the agreement was never made. While refund anticipation loans offer borrowers quicker access to refund money, they typically carry high interest rates (Dow Jones Newswiresand Reuters via The New York Times May 27) ...

• Royal Bank of Canada has agreed to sell its U.S. mortgage business, RBC Mortgage, to New Century Financial Corp.'s Home 123 Corp. subsidiary. RBC Mortgage posted revenue of C$153 million (US$120.8 million) last year--down 46% from C$269 million (US$212.3 million) n 2003. The loss pushed Royal Bank's profits in the U.S. down by 92% in 2004. Royal Bank will continue to offer mortgage services in the southeastern U.S. via its RBC Centura unit, said Royal Bank spokeswoman Beja Rodeck. Royal Bank is Canada's largest lender. New Century, which says it is one of the biggest nonprime mortgage lenders in the U.S., said the purchase would help boost its lending to prime borrowers (Dow Jones Newswires and Bloomberg.com May 27) ...

Thieves stealing car identities

McLEAN, Va. (5/31/05)--Thieves are no longer satisfied stealing just your identity--now they want your car's identity, too (USA Today May 20).

Recently, thieves have been stealing vehicle identification numbers (VINs) on luxury cars and sport-utility vehicles and placing them on stolen automobiles so they can't be easily traced.

The scam, which first appeared three years ago, is growing. In the past year authorities have seized 600 autos with duplicated VINs. The VINs are taken from cars in mall parking lots, car dealer showrooms, and Internet auction sites. As long as the cars are similar in make, model, and year, thieves can place them on stolen cars.

Unsuspecting car dealers and consumers have been scammed. Cars purchased at reputable dealerships have been identified as stolen vehicles. While most insurance companies will cover the loss, consumers will pay in the form of higher rates and fees.

Stolen cars with phony VINs aren't detected until two vehicles with the same VIN are registered to different people. This usually happens when insurance companies, the insurance crime bureau, or the police find the duplication. However, detecting cloned cars is difficult because only six states can search one another's vehicle title information. Industry experts say a nationwide database of vehicles is needed to stop this new scam.

Resource Links

Statement Stuffer: Get a New Car at Your Price

Products and Services briefs

• LINCOLN, Neb. (5/31/05)--Information Technology Inc., a subsidiary of Fiserv Inc., and GlobalVision Systems Inc. have teamed to provide a regulatory risk management system to help financial institutions comply with the Bank Secrecy Act and the USA PATRIOT Act. Financial institutions that already use ITI's Premier software can deploy Premier Patriot Officer. The system uses knowledge-based artificial intelligence to help detect suspicious activities; keeps five years of records, including reports filed with the Financial Crimes Enforcement Network; produces reports for regulators' examinations, risk management and auditing; identifies high-risk customers through multidimensional risk scoring; and automates detection, investigation, monitoring and filing of suspicious activity reports ...

• AUSTIN, Texas (5/31/05)--First Lenders Data Inc. (FLDI) and Realink Corp. have formed a strategic alliance to provide mortgage lenders with Realink's appraisal services within FLDI's FirstClose vendor management program. Lenders will have access to all of Realink's appraisal and valuation services including RealValue, the desktop appraisal system used for home equity lending. The integrations provides FLDI clients with an option to upgrade to a desktop appraisal when an automated valuations model fails to return a value or the returned value falls outside lender tolerance guidelines ...

• CHICAGO (5/31/05)--Credit unions that use Ultradata for core processing can now drive individually targeted offers to members based on their use of checking and credit card channels. The targeting, delivery and tracking system was developed by aaBeck Technology Group. It uses summarized transaction data provided by the extraction module developed by FAFCU Financial. "Only relevant and timely offers get served," said Mike Ceranski, president, aaBeck. "Consequently, offers are noticed and generate high click-through rates. Clicks can be tracked and correlated to subsequent accounts being opened." The t-Extractor/WebMRM bundle is available in ASP and in-house versions ...

CUSCAL: Access to member lists prompt takeovers

SYDNEY (5/31/05)--The Credit Union Services Corp. of Australia Ltd. (CUSCAL) has petitioned Australia's regulator of corporations to freeze any application asking for access to credit unions' member registers because access may facilitate takeovers of the credit unions (The Australian and Australian Associated Press Financial News Wire May 27).

The Australian Securities and Investments Commission (ASIC) allowed Mackay Permanent Building Society, a company listed on the Australian Stock Exchange (ASX), access to the membership register of Capricornia CU. CUSCAL says the access enabled Mackay to directly pursue merger discussions.

The letter to the ASIC protests that the access raised commercial, privacy and security issues, and said that an ASX-listed entity proposing a merger with a credit union in effect proposes the demutualization of the credit union and a takeover.

The release of member details means they could be "bombarded with tendentious material" by anyone proposing a merger, the letter said. Members are not protected by the normal conduct and disclosure requirements in a takeover.

Capricornia is challenging ASIC's decision in an administrative appeals tribunal.

ASIC plans to release a consultation document about the issues related to access to member registers. CUSCAL said it welcomed the release but was disappointed in the timing, which means "we are engaging with the gatekeeper while the bolting horse is pursued through the AAT," CUSCAL's letter said.

ASIC's role is not to encourage a backdoor option for takeover proposals, the letter said, adding, "There will be no shortage of predators looking for a quick profit from demutualising a credit union."