Making My List and Checking It Twice
As is tradition, Credit Union Times’ Year in Review issue is when I make predictions for the upcoming year. I predict YIR 2012 will be no different.
Last December I wrote that forward-looking leaders (and those with the resources) would grab the reins of Bank Transfer Day and hold on tight; those who chose (I know some were blocked by SEGs or other reasons) to disregard BTD chose to disregard what it is to be part of a movement. The numbers do not lie. The industry overall is experiencing tremendous growth at 2.8% in the 12 months ending in October and 2.4% year-to-date, according to CUNA. However, not everyone is on the member growth bandwagon, Glatt Consulting uncovered. Credit unions with $50 million or less in assets experienced flat to negative membership growth through 2012. Only the larger credit unions reaped the benefits. Those in the $500 million and larger range had 4.59% membership growth.
Another interesting case involving a bank is Thrivent, which decided to convert back to a credit union after previously a group of credit unions converted to this bank. Additionally, three credit union conversions to banks have been stalled this year. Technology CU’s members voted down a conversion to a bank, and Har-Co FCU’s conversion has been stuck in one of the regulatory circles in Hell, as has HarborOne CU’s conversion.
Separately, when the $388 million Educational Systems FCU planned to take in the similarly sized and ailing MCT FCU, the new members were originally going to be charged a $35 fee to help the credit union maintain an acceptable capital level. This was an innovative idea and one that I’ve supported as member-owners reap the rewards of their credit unions, so, too, should they share in the costs of bailing it out. I think 2013 will see similar attempts as the NCUA and ailing credit unions become more desperate to find merger partners that can afford to take them on and have an appropriate cultural and field of membership fit. The credit union will have to make up that money and it will in other ways that likely will get applied to all of the members, which the existing members of the continuing institution wouldn’t have to be worried about if no merger had taken place in the first place.