The initiative, which takes the form of a resolution to Congress now under consideration by the Utah Legislature's Financial Institutions Task Force, is threatening to reignite the decades-long feud between bankers and their credit union rivals.

"We now have dozens of [state-chartered] credit unions that are considering converting and all this resolution does is create a 'decision point' for them on whether they should continue with the process," said Scott Simpson, Utah League of Credit Unions president.

The bank-credit union feud last erupted during the 2003 legislative session when lawmakers passed House Bill 162, a measure that sought to tax and rein in expansion of Utah's largest credit unions. The legislation also set up the Financial Institutions Task Force, which was charged with studying the divide between the two groups.

Although the tax provisions of HB 162 were put on on hold, Utah's largest credit unions targeted by the law - America First, Mountain America and Goldenwest - chose to escape the lingering taxation threat.

They switched to federal charters, which put them under the supervision of federal rather than state regulators. The switch cost the Utah Department of Financial Institutions hundreds of thousands of dollars in lost income and the state millions in lost tax revenue.

Prior to passage of HB 162, Utah had 89 state-chartered credits unions with combined assets of $6.4 billion. Since then, however, 21 Utah credit unions have left the state regulatory fold, leaving only 68 credit unions with total assets of $1.7 billion.

"We've lost the lion's share of the assets and the [regulatory] fees that go along with them," said Orla Beth Peck, supervisor of credit unions at the Utah Department of Financial Institutions.

The proposed resolution now before the state task force may further fuel the exodus, although one provision would open an avenue for Utah to tax those credit unions that have left state supervision.

It urges Congress to allow the state to determine which taxes should apply to federally chartered credit unions operating in Utah.

Rep. Jeff Alexander, R-Provo, who sponsored HB 162 and more recently introduced the resolution to the Financial Institutions Task Force, contends the resolution will do nothing to take away the tax-exempt status of Utah's small credit unions.

"If Congress tells us they like where credit union are now, then maybe we should consider moving our state charter closer to the federal charter," Alexander said. "This could benefit our credit unions."

Utah credit unions, however, view the resolution differently. They expect lively debate if the task force adopts the resolution and sends it to the Legislature for consideration.

"They're going to force us to defend ourselves again," Simpson said. "They [banks] are just seeking another toehold to push forward with their agenda [of taxing credit unions.]"