Most league CEOs chose not to publicly share their reactions to CUNA's board of directors' decision to reject three recommendations made by the CUNA System Structure and Governance Task Force. The move would have given credit unions the choice to join CUNA and/or a league, a controversy credit unions have been debating for 20 years.

Perhaps one reason for their silence was that they knew a plurality of credit unions that responded to a CUNA survey favored membership optionality, and large credit unions held that view by a two-to-one margin.

But one trade association, the Michigan Credit Union League, listened to the majority of its credit union members and will allow them to join the league without joining CUNA – a move that surprised league presidents.

The CUNA board also gave a thumbs down on other task force recommendations to enhance cooperation and interdependence with leagues in the delivery of advocacy for credit unions, and streamline the CUNA board structure from 24 board members to 15.

After CU Times contacted all of the league CEOs by email and/or phone, presidents from the Cornerstone Credit Union League, Maine Credit Union League, Credit Union Association of New Mexico and Credit Union Association of the Dakotas said they agreed with CUNA's decision.

“The board expressed appreciation for the CUNA/league system that takes advantage of the resources we have at both levels without duplication, which has been such a strong backbone to what we have accomplished over the years,” Dick Ensweiler, president/CEO of the Cornerstone Credit Union League, the largest league in the nation, said.

A few other CEOs said they wanted to give the CUNA board's decision more thought. Others said they didn't have enough information or needed their boards to mull it over first.

For example, the board of directors for the League of Southeastern Credit Unions, which doesn't hold an official position on the dual membership requirement, is expected to discuss it at a planning retreat meeting the week of Sept. 28.

But what raised more than a few eyebrows among credit union leaders, however, was the decision by the board of directors of the Michigan Credit Union League to allow its member credit unions in 2016 to join the state league without joining CUNA.

CUNA did not respond to CU Times' requests for its reaction to the Michigan league's direct membership decision and its consequences. What's more, it's uncertain whether other leagues may follow Michigan's lead.

As far as the Michigan league is concerned, allowing direct membership won't violate any CUNA bylaw or policy requirement.

“We don't believe there is a legal or a strict bylaw requirement,” Michigan Credit Union League President/CEO Dave Adams said. “If there is and if we are found to be in violation of that, then we will have that discussion and deal with it. We believe that our association should have control over its own membership requirements.”

The Michigan league's bylaws do not state a requirement for its credit unions to become members of CUNA. Although CUNA bylaws state credit unions that join their leagues automatically become members of CUNA, they are only recognized as members when they pay national dues.

Adams said he informed CUNA about the Michigan league board's decision to allow direct membership on Sept. 18 when the CUNA board of directors, the task force and league CEOs met in Madison, Wis.

“That took us by surprise,” Ensweiler said. “We were all taken aback by it. We asked him a bunch of questions and he was pretty firm that this is what he believes.”

Adams emphasized the Michigan league respects the decision made by the CUNA board.

“Our board's action was not in any way a suggestion that we think credit unions in Michigan should consider not affiliating with CUNA,” Adams said. “Our board's action was simply one to change the requirements so that if there is a financial hardship or some other compelling reason why a credit union might not be able to stay affiliated with CUNA, they would have the option of being affiliated with the MCUL and not drop out of the system.”

He added, “And that was done in large part because we asked our credit unions for their input, they gave it to us and our board responded. It's more about choice, and it's not at all about any perceived dissatisfaction with CUNA.”

Currently, all but three of Michigan's 260 credit unions are affiliated with the league and CUNA. Adams said his staff will strongly encourage all of Michigan's credit unions to continue their affiliation with CUNA.

“I think credit unions should support CUNA and their state associations because our belief and my belief is that the CUNA/league system is the best option for credit unions if they hope to be united to get things done in Washington and in the state capitols,” Adams said. “We want to move forward to make the strongest value proposition we can and encourage unity and support for the CUNA/league system.”

John Murphy, president/CEO of the Maine Credit Union League, agreed that the CUNA/league system is the best and the envy of many other national trade associations, but he disagrees with the Michigan league's decision on dues optionality.

“I see the benefits of the interdependent structure day in and day out,” Murphy said. “I don't see that choice over the long term as having the benefits that some believe it would have. I support the dual membership. I respect everybody's position on it. But from our own experience, we believe that the structure we have has served us the best and can serve us even better in the future if we determine we want to make some changes to it.”

Paul Stull, president/CEO of the Credit Union Association of New Mexico, said he was very encouraged by the action of the CUNA board.

“When the settlers crossed the plains, wagon trains were always safer with larger numbers of wagons,” Stull said. “If there was a river to forge an attack by bandits or a broken wheel, more was better. Every significant advocacy accomplishment made by credit unions, from the Membership Access Act to the push back on risk based capital, has happened because of a cohesive unified approach. History proves an interdependent system is the best way to advance credit unions. We are all stronger together.”

As a member driven trade association, Jeff Olson, president/CEO of the Credit Union Association of the Dakotas, said his association was pleased with the direction that the CUNA board took on the task force recommendations.

“We believe that the true value proposition for credit union members is our interdependent ability to engage, harness and activate member level support while successfully cultivating awareness for the financial cooperative model as a better financial alternative for consumers,” Olson said.

For other league CEOs, such as Patrick LaPine of the League of Southeastern Credit Unions, the dual membership controversy was more complicated.

Although LaPine personally favors dues optionality, as a CUNA board member he voted to keep the dual membership requirement.

LaPine was elected earlier this year to the CUNA board of directors to represent league presidents in District 3, which includes North Carolina, South Carolina, Georgia, Florida, Alabama, Tennessee, Mississippi, Louisiana and Arkansas.

“In my personal opinion, I believe in dues optionality, and I don't think that is any surprise to my colleagues,” LaPine said. “Representing the league presidents in District 3, and I spoke with all of them before the CUNA board meeting, my vote reflected the majority of my constituents.”

Nonetheless, LaPine believed the CUNA/league partnership was the best system to advance the advocacy goals and interests of the credit union industry.

“The CUNA board concluded that in order to be the most effective national advocacy organization, CUNA and league interdependence is essential,” LaPine wrote in his weekly column in the league's newsletter eSignal Daily. “I whole-heartedly agree with this statement. However, I don't agree that interdependence should be defined as requiring dual membership.”

LaPine said he expects the 16-member LSCU board to discuss the task force recommendations and the actions taken by CUNA. LaPine said he will not be making any recommendations to the league board when it meets during a planning retreat the week of Sept. 28.

“I think my board will want to have a robust discussion about what happened and then decide what we believe collectively is in the best interests of our member credit unions,” he said.

Instant Insights /

Leagues Debate CUNA Board Decision

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