Credit Unions: The Good, The Bad and The Ugly
creativity this week. While many think of creativity as that rare, unique idea that only one in a million come up with, much of creativity lies in what you already know.
For example, credit unions have really stepped up to the pump for members and staff. Gas prices are soaring out of control and everyone's griping about it at the water cooler. Gas prices, while skyrocketing, are a very concrete thing for people to understand. So some credit unions gotten creative and have decided to offer employee incentives to carpool rather than just letting those complaining employees go to save on their own skimpy budgets in this down economy.
Credit unions are reaching out to their members with creativity in the economic pinch as well. Credit unions know auto loans; credit unions know auto lending is down. Many things are too blame: the general economy, resetting ARM rates, increasing gas prices--you name it. But how credit unions have gotten creative with what they know well--auto lending--and are serving themselves and their members well is expanding upon that idea. Some credit unions announced this week that they are beginning to offer scooter loans, which entail lower payments and much higher miles per gallon, and they hope those will help recoup the lost auto lending income.
In Iowa, during the flooding the state league was working to find out which credit unions were up and running, keep communications open with them, and provide aid where needed.
And, as airlines announce another round of layoffs, their associated credit unions are standing by. These credit unions are making riskier loans, like greater than 100% loan-to-equity ratio mortgages, to good members who don't have a job or may not
tomorrow. They are offering loan payment reductions to get financially strapped members through the rough patch. This is what credit unions were established to do.
On the other hand, some of them--few and far between--astound me in not-so-good, but creative, ways.
Take for example the battle waging at Del Norte Credit Union. From what we've reported, the credit union board has taken away the members' right to vote on their supervisory committee two days after the deadline for voting and then trying to apply it retroactively. And the reason the credit union board is trying to exert more control over the supervisory committee--the committee that serves as ombudsman to all they do--is because the committee was trying to perform its function by auditing a previous election in which a candidate lodged a formal complaint. The supervisory committee chairman was not only
kicked off the committee but expelled entirely from the credit union.
Disenfranchising the members' votes, subjugating the committee that dared to question the board and management, punishing one with expulsion--sound one sided?
Well it is. That's because the representatives from Del Norte Credit Union have not returned numerous contacts from Credit Union Times staff.
This really is making their situation worse than it could be in reality. By not talking, the only point of view that gets out is that of the supervisory committee and it makes the credit union look guilty. I know news reporters are the butt of as many jokes as lawyers and lobbyists, but at the end of the day, we're all human beings. Credit Union Times would rather be able to run a balanced story with comments from Del Norte and the supervisory committee but that has been made impossible by Del Norte's reticence. Obviously the credit union's silence has not silenced us; the situation is out in the public domain and it's going to make headlines. I would think commenting on what the credit union can to establish its side of the story would amount to better damage control--if that is what is needed--than clamming up.
The same holds true for mutual savings bank conversions. There very well could be very legitimate reasons that a credit union would have to convert to a bank to thrive in the current financial services marketplace. Trouble is, we aren't hearing anything from the converting credit unions about their trials and experiences that led to the decision to open it up to a membership vote or the process after that. Write us about it.
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