Sometimes It Doesn't Pay To Be Too Subtle
Credit union CEOs who orchestrate a charter conversion to a bank should be fired for not representing the best interests of the credit union's members. Boards involved should also be replaced. For the same reason. Time to cut through all the cutesy rhetoric such as the pure baloney that a charter conversion is what the majority of the credit union's members really want. A scam by any other name is still a scam! Several years ago, when the first couple of credit union to bank conversions surfaced along with consultants and attorneys who saw a new way to fatten their personal coffers, the editor of Credit Union Times asked the CU trade group(s) leadership point blank if they were at all concerned that this could be the start of a trend. They said no, quoting the small number of CUs, assets, and members involved, something they unbelievably still do. Now that two Texas mega credit unions successfully told NCUA to get lost and are free to jump ship taking with them millions of dollars of credit union assets and thousands of members, have the "What me worry?" folks changed their minds? Not really. In fact, even respected former NCUA Chairman Dennis Dollar says in effect in his many speeches around the country as a consultant, not to worry. Perhaps after conversion attempts by Columbia Credit Union and Lake Michigan Credit Union were shot down, the head-in-the-sand crowd couldn't be faulted for optimism. But now? Dream on! (Readers wanting to weigh in on this topic can do so on the new poll on cutimes.com.) Another topic where subtleness should be set aside: Too many credit union boards no longer represent their credit union's membership. Many boards are almost 100% male. Many are made up strictly of senior citizens who consider decades of service a badge of honor and their greatest accomplishment. Many CU boards are comprised entirely of retired former employees of the original sponsor who may make up as little as 20% of the current credit union membership. The credit union name changed years ago as did its field of membership. Since its single sponsor days, the credit union has become large and sophisticated with greatly expanded products and services offerings, new facilities, and high-tech delivery systems. But the size and make-up of the board stay the same. In fact, in many credit unions, the good old boys club is alive and well. Adding women, minorities, members of the community served, or young people to the board is not going to happen anytime soon. It is long past the time to stop viewing credit unions boards through the Emperor's New Clothes eyes. Too blunt? How about this? Too many credit union CEOs are living proof that Peter's Principle is also alive and well. I am personally familiar with at least a dozen or more CU CEOs who have taken early retirement, but forgot to tell their boards and are still drawing a regular paycheck. When credit union folks gather round to discuss such weighty topics as the survival of credit unions, boards and CEOs should be at the top of the discussion list. Then there is this subtlety: Katrina showed once again that the credit union industry is still largely unknown in non-credit union circles. In talking to a number of people, they were amazed when I explained to them how and why Credit Union Times swung into action to provide the most thorough and timely coverage on the dozens of credit union aspects to this huge and still unfolding page one news story. Many were not even aware that dozens of credit unions and CU support organizations were directly and severely impacted from the moment Katrina came ashore and unleashed her fury. Most people had no clue that a natural disaster like Katrina immediately involved those that manage and belong to credit unions, those that insure and regulate them, and those that provide operational support. Until the credit union industry mounts a comprehensive and coordinated national public relations effort, credit unions are doomed forever to having to explain what credit unions are and do entirely from scratch over and over again. What a pity that so little is known about credit unions, not only when disaster strikes, but on a day-to-day basis. The mainstream media, local, state, and national politicians, friends and neighbors, and co-workers demonstrate frequently that they don't have a clue how a credit union differs from a bank. Shouldn't they? Before they need to know? One of many unfortunate consequences of Katrina's is the fact that many of the destroyed single location, small, credit unions will never re-open. The people who run them will have all they can do to get their own lives back together let alone reconstruct the small CUs they managed. Vital records, the backbone of the credit union's operations, are probably destroyed and lost forever. And finally this: Some Canadians and Australians would like American credit unions to think that being taxed isn't all that bad. However, if you ask, many more Canadians and Australians will tell you that taxation has had a terrible effect on credit unions in their countries. Evidence is everywhere. In Australia, for instance, the number of credit unions has dropped far faster than the trend downward in the USA. Loan-to-share ratios are down. There are now half as many CU branches while in this country they are growing in number to meet member demand and needs. The number of CU members has flattened with almost no growth since taxation. Credit unions no longer cooperate with each other. They can agree on almost nothing. They see themselves as small banks and act accordingly to those they serve. Hope this isn't too subtle, but anyone who thinks taxation of credit unions in Canada and Australia was a good thing for members there is just plain crazy. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail firstname.lastname@example.org.