Washington Post Article on Credit Union Bank Conversions Highlights Banker Role
WASHINGTON - An article that ran in the Feb. 11 Washington Post provided an overview of the issue of credit unions converting to banks, tagging the issue as a strategy bankers are using to achieve victory over credit unions. "Some bankers envision a wave of conversions as officers, volunteer directors, and some members of credit unions realize they can make a lot of money if they switch over to a stockholder-owned institution," the paper wrote. The story then quoted Richard Hartnack, an executive with U.S. Bancorp to the effect that bankers were hoping that "at some point, either the management or the members or both will figure out what [their credit unions] are worth or their enlightened self-interest takes over." The article also quoted the consulting firm CU Financial Services about how much money directors and managers could make if they led their credit union through a charter conversion. It also quoted Kay Hovland, CEO of Kaiser Federal Bank, formerly Kaiser Permanente FCU, to the effect that she didn't want to become a bank but that at the time (1999) there wasn't much choice with charter restrictions and other factors. CUNA CEO Dan Mica told the Post that the banking industry has a strategy to "contain and convert" credit unions and "what they are trying to do is play with the minds of our CEOs" by suggesting that if they do not convert, their successors will - and collect the benefits. Also helping press the case for conversion is a small group of lawyers and consultants who not only encourage the process but have made a business of helping credit unions through it, he said.