State Employees’ Credit Union President/CEO Jim Blaine saidhe has no beef with CUNA or the Carolina Credit Union League. Infact, he said the $27 billion SECU has been very involved in theseorganizations for a very long time.

However, Blaine said Raleigh-based SECU decided not to renew itscombined $340,000 membership dues – $250,000 to CUNA and $90,000 toCCUL – because there are serious issues that are not beingaddressed by both organizations.

Though the merging of the North Carolina and South Carolinaleagues was overwhelmingly approved by member credit unions lastyear, the number of credit unions in the two states continues toshrink.

“After the merging of the North Carolina and South Carolinaleagues and the number of credit unions in those states continue toshrink, what do you do next?” said Blaine. “The long range(question) is what is the role of the CCUL going forward? This isnot a complaint on our part, but you are heading to a collisionwith realty and that reality is that the number of credit unions isshrinking. You can't escape that fact and it ought to be dealtwith.”

Blaine said he also has issues with the CUNA board structurethat includes representatives from only six leagues, but there are40 leagues in the nation. That should prompt some cooperativeconcerns, he said.

“Why should a quarter of CUNA's 24 seats be allotted to sixleagues out of a pool of 40 state leagues? And who do the leaguesrepresent as they consolidate?” he said.

When SECU was presented with the consolidation of the NorthCarolina and South Carolina leagues, he said it made sense from thestandpoint that it would save costs. But what didn't make sense toBlaine was when he was told that his membership dues would morethan double.

“We are only in North Carolina,” Blaine explained. “Prior to themerger, we had the entire (NCUL) staff and they were doing a greatjob. Now we have half of their time and energies and we are goingto pay twice as much. I have a hard time explaining that to theboard and other people.”

However, Blaine said that CCUL has since backed off its proposalto increase membership dues.

“Small credit unions want more services (from their league) andlarger credit unions want lower costs (from their league),” Blainesaid. “Those issues are being kicked down the road, but they arenot going to go away because we all agree that the number of creditunions is going to continue to shrink, if not accelerate. Thoseissues need to be addressed.”

Last fall, SECU backed a proposal that would have allowed CCULto conduct a one-year test pilot program that would have allowedCCUL members the choice of joining CUNA or the league.

The objective of the pilot program was to observe what impactaffiliation choice would have on the state league and CUNA,including changes in affiliations rates, dues revenue, and whataffect would affiliations choice would have on legislative,regulatory and political affairs.

But Blaine said the test pilot program was not accepted by CUNAand CCUL late last year.

Blaine wrote a Jan. 31 letter to John Radebaugh, president/CEOof the Carolinas Credit Union League, informing him that SECU wouldnot renew its 2014 membership.

“SECU asked that consideration be given for credit unions tohave the option to separately choose between membership in CUNA andthe league,” Blaine wrote. “The right to independently choosemembership and to have direct representation in CUNA appears to bevery much in line with our core cooperative principle – one member,one vote.”

Blaine's letter continued: “The accelerating pace of themerger/dissolution of credit unions, paired with the resultingconsolidation of numerous leagues, would indicate an urgent,inevitable need for structural changes in our trade association, ifcooperative principles are of key importance.”

Radebaugh responded to Blaine's letter: “We believe affiliationprovides great mutual benefit for our organizations and aredisappointed in your decision. Nonetheless, we respect yourdecision and appreciate the notice.”

CUNA President /CEO Bill Cheney also responded to Blaine'sletter and invited him to meet with the CUNA executive committeelater this month. Cheney also noted in his letter that incomingCUNA Chairman Dennis Pierce (CEO of CommunityAmerica Credit Unionin Lenexa, Kan.) is appointing a Renewal Review Committee to lookat Blaine's concerns and others immediately following the CUNAGovernmental Affairs Conference.

Blaine wrote a brief letter responding to Cheney, writing: “GladDennis has appointed a committee. That should be helpful. SECU doesnot have any remaining concerns which require discussion. Wish youand CUNA the best of luck in the future.”

CUNA to Modify Budget

CUNA will modify its 2014 budget to make up for thedisaffiliation of the $27 billion State Employees’ CreditUnion.

“This disaffiliation happened early enough in the year that wecan make the necessary adjustments to deal with it,” Pat Keefe,CUNA's vice president of communications, told Credit UnionTimes.

“We do budget and plan for items such as membership attritionand dues waivers, as well as re-affiliations,” he added.

The North Carolina credit union would have paid $340,000 inmembership dues this year, $250,000 to CUNA and $90,000 to theCarolinas Credit Union League.

“SECU asked that consideration be given for credit unions tohave the option to separately choose between membership in CUNA andthe league,” SECU President/CEO Jim Blaine wrote in a letter toCCUL President/CEO John Radebaugh.

Keefe said dual membership in both CUNA and the leagues bycredit unions has been required since the 1990s.

“This ensures strong representation for credit unions at thestate and national levels, and (in particular) gives us grassrootsreach that no other trade group can match,” Keefe said.

Facebook Discussion on SECU Decision

CEO Jim Blaine's decision for State Employees’ Credit Union notto renew its membership with CUNA or the Carolinas Credit UnionLeague has sparked some debate on Credit Union Times’ Facebookpage.

The $27 billion SECU's decision to disaffiliate stemmed in partfrom the dual membership requirement that requires CUNA membershipto belong to affiliated state leagues.

David LeNoir Sr., member relations consultant at the League ofSoutheastern Credit Unions, expressed his dismay that “at the verytime credit unions need to rally and support one another, SECUtakes the decision to withhold support of its state league.”

Reader Matthew Cropp wondered if “this is symptomatic of thelogical end-point of the merger and consolidation trend that hasbeen afoot since the professionalist faction won the shareinsurance fight in 1970.”

According to LeNoir, collaboration with, and not consumption of,smaller credit unions should be an option, and leagues can assistin supporting this relationship.

Cropp agreed in principle, commenting that “credit unions rootedin authentic community are the best exemplars of our movement'svalues. Unfortunately, though, it's going to take some MAJORstructural changes to remove the driving forces behind the tide ofprofessionalization and consolidation, and the political will tocounter that inertia does not seem to exist in anything close to acritical mass at the moment.”

Blaine also cited the ongoing trend of credit union mergers as areason the CUNA and affiliated league business model needs tochange.