Let's preserve our uniqueness

It is probably unwise to get into a written debate with someone who publishes a newspaper, but I feel compelled to respond to Mike Welch's recent Op-Ed column titled "CUs must stop internal bickering and unite" (CU Times, March 14). I am bothered by several off-target comments in the column. Let me start with comments regarding the Renaissance Commission. The Renaissance Commission states, "It will seek broad input from a variety of sources. It will provide an open forum to all elements of the credit union movement and those having an impact on the movement." In fact, headline in the March 7 issue of Credit Union Times states, "Renaissance Commission: speak now or forever hold your peace." Clearly, the commission wants to carefully consider all opinions. The implication in Welch's column is that the opinions expressed in Bob Bream's testimony are less worthy of consideration than those of Shane Berger, CEO, Beehive Federal Credit Union-a small-sized credit union-or any other credit union. Did Welch happen to notice that Mr. Berger's testimony was remarkably similar to the testimony of the "Big Five" credit unions? Mr. Berger stated, "While we would all like to see some changes in the Federal Credit Union Act and in the way we are regulated, my message to this commission is to `proceed with caution' because there isn't any one change or group of changes so important that we should risk giving up one of the main benefits of our cooperative structure." This doesn't sound like internal bickering and separation to me. The Treasury Department recently issued a similar warning to credit unions. In a recent study, the Department of the Treasury cited our cooperative structure as one of five unique credit union distinctions. Those distinctions are: (1) cooperative structure, (2) capital accumulation, (3) unpaid boards of directors, (4) public purpose, and (5) common bond. According to the Treasury, only these "distinctions" remain as the basis for credit unions' continued tax-exemption. The Treasury Report cited what happened to mutual savings banks after they lost their distinctiveness. The Treasury Report goes on to say that our products, services, and governance is similar to banks; therefore, we should carefully and thoughtfully evaluate the potential consequences of altering our organizational structure, methods of capital accumulation, unpaid volunteer leadership, and the common bond concept. In short, Treasury believes and I agree that leveraging our distinctiveness, rather than sacrificing it, is the formula for continued success of the credit union movement. While powerful political leaders have assured us that our tax-exempt status is not threatened, it would be sheer folly to assume that the assurances are worth a plugged nickel if credit unions are permitted to substantially change the way they currently are organized and operate. If we have a so-called "FCU Modernization Act," there would be substantial pressure on these same political leaders to provide a quid quo pro for banks as was done during the passage of H.R. 1151. If legislative history has taught us anything, it has taught us that you seldom get exactly what you want, usually get more than you bargained for, and often compromise those issues of greatest importance. Let me turn now to the statement that banks created the disagreement regarding whom credit unions should be allowed to serve. It is true they may have contributed to it, but we, the credit union industry, have continued to perpetuate it. Why do we want to emulate banks with open fields of membership? Credit unions serve their fields of membership, as stated in the Credit Union Membership Access Act. Fields-of-membership encompass a broad spectrum: single sponsor, multiple SEG, and community. These fields of membership are voted on and approved by credit unions' board of directors and are then presented to NCUA requesting their review and approval. NCUA currently has a less than 1% denial rate for FOM expansions and additions. It is hard to see how NCUA is limiting the growth of the credit union movement. The Big Five's testimony sought to illustrate that the credit union model works. Credit unions can be successful without compromising our fundamental credit union philosophy and organization. All five credit unions began small with a handful of members seeking to make loans to one another. Throughout the years, we have focused on leveraging the credit union uniqueness and on serving our existing and potential members well. Growth was a natural outcome. Stories continue to abound that the most successful credit unions are those focusing on serving and penetrating existing membership groups. Diversity, both in size and structure, is a strength of the credit union movement. Our differences are our strategic advantages. We must preserve the benefits of our differences and uniqueness. I, for one, vow to continue to fight to preserve our uniqueness. Expressing my opinion and supporting others who have the same opinion should not be taken as internal bickering. We are engaged in an important, far reaching debate about the future of the credit union movement in the United States. I totally agree with Welch's last paragraph. I think highly of Credit Union Times, and I urge Welch to use his considerable talents to help bring the credit union movement together. B. L. McDonnell President Navy FCU Vienna, VA