Retail CUs Do Have a Future
certainly am convinced of the validity of the statement in the Editor-in-Chief's Feb. 3 column that "In the pages of the Credit Union Times, we like to promote discussion and provide a variety of points of view relevant to credit unions."
However, I take issue with the same column saying that my legacy asset opinion article,
"Corporate Legacy Assets Hang Over the Industry" (CU Times, Jan. 27), "in essence, state that credit unions are dead and they should become banks." That's an oversimplification at best, and simply wrong at worst. I will concede that my legacy assets article could be interpreted as declaring corporate credit unions dead, but I certainly didn't say that retail credit unions were goners.
Although I did not mention it, I will confess to believing that the "mushy sentimental" (your words) version of the credit union charter is on life support. I think that the retail credit union charter can be resuscitated with major surgery on credit union capital structure, governance options, deposit insurance reforms and increased income access, among other statutory and regulatory changes. Despite the fact that the bank charter has significant appeal under current circumstances, eulogizing the retail credit union charter is premature.
I was also not surprised by a Letter to the Editor from Suncoast Schools FCU CEO Tom Dorety (Credit Union Times, Feb 2). Mr. Dorety must have drawn the short straw when the self-appointed movement illuminati conferred and decided they had to respond to my article, as well as to a separate article written by charter conversion consultant Alan Theriault. After a confusing and inappropriate attempt to compare us to an obscure freshwater fish in an analogy that was likely lost on all but the ichthyologists among your readers, Mr. Dorety proceeded to agree with me on just about everything that I said and most of what Mr. Theriault said as well.
For example, Mr. Dorety agreed that "natural person credit unions will be responsible for repaying billions in losses from corporate system losses" and that "to remain the viable, consumer-focused financial institutions we were created to be, we need capital reform." It would appear that even a traditionalist like Mr. Dorety can recognize hard truths on occasion.
Marvin C. Umhotz
Umholtz Strategic Planning & Consulting