Letter: Obstructing Conversions Is Unsavory
Credit Union Times recently published my letter [Oct. 12, page 30] where I argued that interfering with any credit union’s internal governance is an ugly business and is not proper behavior for a trade association.
The California Credit Union League’s message has been that they see their role as “educating members.” They have said, “It is essential that Technology Credit Union members understand the unique benefits which are only available through credit union membership.”
I’ve been told that the CCUL position statement on conversions includes an action item to direct members, the media, and the general public to a central repository of information regarding conversions and their impact on members.
If the CCUL were to implement its plan, it could make an awful mess of things. The NCUA is already overseeing everything the converting credit union said to members, so how is it possible that members could be misinformed?
Unlike the neutral action that the CCUL pretends the repository would be, it would be an obstructionist tactic that is problematic in several ways. As the manager of that website, the CCUL would control what goes on the site and becomes the judge, jury and executioner of the content. A fair and balanced presentation is unlikely considering the obvious pro-credit union skew. The repository website would simply be a bunch of pro-credit union and anticonversion articles.
Very unsavory stuff. Who would corroborate the website’s information or could outright lies and falsehoods be posted? Unlike the membership vote-related content on the converting credit union’s website that is pre-screened and pre-approved by the NCUA, the CCUL’s repository would be ripe for manipulation and malicious abuse–perhaps even leading to lawsuits.
That exposure to legal liability is not just theoretical. The Texas Credit Union League is currently being sued for $24 million its direct involvement with an out-of-control repository website attack against one of its dues-paying member credit unions–First Basin Credit Union of Odessa, Texas.
The point is that if such a misguided plan is implemented in California, the repository could be easily abused and could result in a legal liability for those involved in its creation. And what does it really accomplish anyway? It is predicated on the belief that credit union members don’t fully understand their ownership interest in the credit union and that a conversion would automatically lead to higher loan rates and lower savings rates, a faulty premise in itself.
There is no need to protect these members. They are great at protecting themselves. They will switch financial institutions if they don’t like it post-conversion.
First Entertainment CU