The churning debate on the form, methods and cost of conveying the industry’s advocacy message through the state league network undergoes more scrutiny this week as yet another group of leagues tie the knot this Friday to officially organize the Denver-based Mountain West Credit Union Association.
In this case, it is Colorado, Arizona and Wyoming, which after nearly a year of study, will centralize and combine their processing, education, compliance and personnel functions into a single operation. It is leaving small teams to lobby in non-headquarter state capitols.
But the regionalization approach to a trade structure has come in for new levels of concern and criticism this summer from a wide spectrum of industry leaders. Some have complained that that relocation of league offices diminishes the CU profile and voice at the state level.
Still, the leaders of state leagues that years ago adopted regional formats or did so in the last two years, like Alabama and Florida leagues forming the League of Southeastern Credit Unions, the Northwest Credit Union Association combining Oregon and Washington State and even the Credit Union Association of the Dakotas, insist the formula is working well.
Nonetheless, the issue of regional leagues received fresh attention early this month when the Maryland & D.C. Credit Union Association called off a planned merger with the New Jersey Credit Union League, citing unexplained “differences” over each group staying independent.
There were hints that the Maryland-D.C. group perhaps had sought out other East Coast suitors since there had been a long history of trade jockeying with the Virginia league as leaders at one time had wanted to consolidate with the Maryland-D.C. group.
“When it comes to collaboration, we’ve always been willing to talk at any time to anyone,” declared Rick Pillow, president/CEO of the Virginia League in stressing the cooperative theme that also has been a dominant trend among state leagues this year as the groups try to pare expenses amid a shrinking dues base, fallout from the corporate meltdown, NCUA assessment and trade group disaffiliations.
Susan Newton, who heads up CUNA’s liaison with state leagues as executive director of the American Association of Credit Union Leagues, maintains the record so far is clear that there has been no lessening of lobbying or advocacy at the state level following league consolidation.
“It remains just as strong as ever,” contends Newton, citing the most recent experience of the League of Southeastern Credit Unions with lobbying offices in both Montgomery, Ala., and Tallahassee, Fla., where LSCU is headquartered.
Newton, who also serves as senior vice president of league relations, said a defining trend has been increased collaboration and sharing of common products and services as well as strengthened management pacts on education and processing.
The Texas Credit Union League, for example, has more recently handled an array of internal services for the Arkansas and Oklahoma leagues, and there have been marketing and processing pacts announced last month among affiliates of the Michigan League, LSCU and the Northwest group.
While elected league leaders praise the collaborative movement as wise and needed, the idea of regional leagues still stirs unease and outright opposition.
“It’s hard to keep all your members enthused about advocacy when your state league is headquartered elsewhere,” argues Harry Carter, former chairman and director of the Minnesota Credit Union Network who also is president/CEO of the $277 million Topline FCU of Maple Grove. “You simply can’t feel the same about political advocacy.”
Another Minnesotan, David Sawin, CEO of the $19 million St. John’s CU of Little Canada, said he abhors league mergers and wants none of it for his state.
“I hope this trend stops soon,” said Sawin, arguing that “it is critical to the functioning of a state league to have regular access to the capital, and that is very difficult to do from another state.”
The president/CEO of the Pennsylvania Credit Union Association, James McCormack, said it had no part in any of the merger discussion with Maryland-DC on its scouting for partners. He added, “if I can elaborate, unless there are special mitigating circumstances, I’m not hot on the idea of trade associations from states merging. Services, service corporations, yes, which may or may not include education.”
But all advocacy, “which is our priority is local, and there should be a clear state focus within each on the federal-state advocacy issues,” stressed McCormack. Trade group recognition awards, for example, should have a local spin “with a local board of directors and government affairs committee that support the advocacy-regulatory oversight.”
Taking an opposing view, Scott Earl, the newly named CEO of Mountain West in Denver and the veteran league manager, said he carries “scars” having fought the celebrated battles a decade ago with the Utah Bankers Association and later as head of the Arizona league. He added that he was heartened by the overwhelming support he has received from CEOs in Colorado, Arizona and Wyoming toward the joint league.
“I am pleased with the very positive attitude we’ve received, but you have to remember these kinds of decisions are based on the dynamics of a region and the ability of states with fewer numbers to carry on an effective advocacy program,” said Earl. Consolidation in some instances becomes vital, he said. The risk is that CUs would lose any advocacy message in state capitals without support from the entire system with merger as an option.