Zions Bancorp's announcement Tuesday that it intends to organize a credit union and offer memberships to its employees and bank customers is being viewed as a masterstroke that is likely to galvanize banks across America in their turf war with the credit unions.

"This is really going to light a fire under the banks . . . it's a bold move," said Brad Baldwin, president of Bank One Utah. While Bank One and Zions are normally competitors, when it comes to the credit union issue, Baldwin made it clear they are on the same side in battling the tax-exempt status of credit unions and the unions' recent practice of soliciting members outside of their "common bond," such as employment.Baldwin said that if Harris Simmons, Zions Bancorp president and CEO, is successful in chartering a federally insured credit union, it's likely that other banks in Utah and the United States would follow his lead.

"Here he goes again," said Baldwin of Simmons, "taking a leadership position that will be watched by the American Bankers Association and state and national banks across the country."

Could Simmons just be bluffing? Could his intent simply be a ploy to influence legislation now moving through Congress that would allow the nation's credit unions unfettered access to members? Baldwin doesn't think so.

"Whenever Harris does something, he doesn't do it as a joke. He'll go full speed ahead until someone makes him stop," Bald-win said.

If that's the case, then welcome aboard, said Scott Earl, president of the Utah League of Credit Unions and the Utah bankers arch foe in the ongoing dispute.

"I applaud their (Zions) efforts," said Earl. "I believe the not-for-profit status of credit unions is best for consumers so we stand ready to assist Zions in their efforts to form a credit union, if that's what they intend to do."

Earl said he has no way of knowing if Zions really intends to go through with the credit union application, but he noted that there are some major hurdles to clear before a credit union could be shoehorned into a bank charter.

"They have to remember that the bank would give up control," said Earl. "All the power is held by the members. Harris Sim-mons could put $1 million of his own money into it and he'd still just have one vote, same as any other member."

Earl said that it took 18 months to push the last credit union charter through the regulatory hoops. He said Zions' application could go faster because of the bank's enormous resources, "but it's not a slam dunk."

A representative of the national credit union industry told the Associated Press Tuesday that they view it as a joke.

"It's a spoof. They're making a hyperbolic point there about credit unions not paying taxes," said Scott Sutherland, spokesman for the Credit Union National Association.

"Banks can't own a credit union. A credit union is owned by its members, not outside investors."

But Earl wasn't laughing despite the national organization's reaction to Zions' plan. "I don't want to discourage Zions' efforts here, and I don't want to question their intent," he said.

Becky Wilkes, vice president of the Utah Bankers Association, said Zions' announcement caught the UBA by surprise.

"There is no concerted effort by the association or the other banks to do this," she said. "There were no closed-door meetings to come up with this strategy."

But having said that, Wilkes characterized the move by Simmons as "a stroke of genius."

"It's an interesting twist, isn't it? Why didn't anyone think of it before? Maybe they did, tongue in cheek, but Harris Simmons doesn't strike me as someone who makes threats. I believe he's serious in pursuing it."

Wilkes pointed out that the financial marketplace is highly competitive and customer-driven, so it's logical that Zions and other banks would find a way to deliver what customers want.

Rep. Merrill Cook, R-Utah, sits on the House of Representatives Banking Committee, and he agrees that Zions' announcement has gotten everyone's attention.

"He's (Simmons) made the point very dramatically. This is my kind of guy. He doesn't just talk the talk, he walks the walk."

Cook said the story has national significance and he expects to see it in The New York Times and The Wall Street Journal. He also expects it to come up in Wednesday's meeting of the House Banking Committee.

Cook noted that while he admired Simmons' bravado, he said that any move for banks to move en masse into credit union territory could hurt the existing credit unions, and that would not be good.

"We need a broad and diverse financial industry, and I hope to be a player in bringing that about. I want to help both sides," Cook said.

There are several bills currently in Congress that would change the laws governing credit unions and who they may admit as members. Last month, the U.S. Supreme Court ruled in favor of the banks in throwing out a 15-year government policy that let just about anyone join credit unions, whether they fit into the common bond or not.

The credit unions reacted with a concerted lobbying campaign to push through HR1151, a bill that would revise the current law and retroactively authorize membership for virtually anyone. The bill has 132 sponsors, including House Speaker Newt Gingrich.

Also, Rep. Chris Cannon, R-Utah, is sponsoring a bill that would "grandfather" all current credit union members and allow them to remain in their credit unions regardless of what happens with other legislation, including HR10, the massive rewriting of the 60-year-old code that governs the nation's financial services industry.

In what might be considered massive understatement, the credit unions' Scott Earl said that the next year or so is going to be "very interesting" for both banks and credit unions, noting that both sides can now put pressure on Congress where they could not influence the courts.

But it's clear that he believes the credit unions are holding the strongest hand politically: "We have a million credit union members in Utah, and when push comes to shove, they will stand up for their credit union. We are asking them to stand up to the mark."