NORTH HIGHLANDS, Calif. – SAFE Credit Union President and CEO Henry Wirz knows first hand how important field of membership can be, even for a large CU. Wirz recently wrote CUNA to talk about this key topic in CUNA’s Renaissance Commission report, and others. CUNA’s Board is scheduled to vote on the subjects in the Renaissance report on October 30, after being delayed from voting at CUNA’s Symposium due to its cancellation stemming from the terrorist attacks. “The recommendations of the Renaissance Commission are a great start as we define our needs and seek the legislation that will allow us to continue our mission of improving our members’ financial well-being. We will not agree on every change. In fact, important changes throughout history have always met with opposition. The alternative of doing nothing will likely make credit unions irrelevant,” Wirz wrote. He explained, “Credit unions are closer to the consumer, community based, and democratically owned and operated. Credit unions are the safety valve that keeps financial services competitive for the average consumer. Credit unions are an important source of innovation that provides new ideas, new services, and new products for their members.Without laws and regulations to strengthen us, credit unions will become just another kind of community-based institution that is no longer relevant.” Wirz told Credit Union Times that, specifically in California, base closures and corporate mergers threatened the viability of many credit unions. The ability to have an open FOM is a great way to keep credit unions thriving with new members and money, he advocated. He added that the Sacramento area was a textbook example of how credit unions can have open FOMs (Wirz said the California regulator has never denied a charter expansion.) and compete while still working together. “I haven’t seen any disparate effects on small credit unions,” the head of the $850 million asset credit union said. One of the most hotly debated topics to come out of the Renaissance Commission is permitting credit unions to establish their own FOMs. As a credit union forced to convert to a state charter in order to serve its members after the McClellan Air Force Base, one of SAFE’s membership bases, was closed down, SAFE needed to expand its FOM. When NCUA denied SAFE’s application to serve the community where its members lived, consisting of the Sacramento-metropolitan area with a population of 1.7 million, the credit union converted to obtain the community under California’s more liberal FOM policy. Wirz said he would hope but is not entirely sure if SAFE resubmitted its application to the NCUA today for the community that it would be approved. “Open fields of membership have created a healthy, competitive environment that has increased an already high level of member service,” Wirz advocated. “Members can compare rates, branch locations, fees, and service. Moreover, competition has not decreased the level of cooperation among the local credit unions.” He added that there is no evidence that open FOMs hurt small credit unions. “To the contrary-open fields of membership allow small credit unions to compete for members they would otherwise not be able to serve,” Wirz explained. “The failure of small credit unions has more to do with the level of service they offer than it does with competition.” He added that he hopes Renaissance does not turn into a large versus small credit union debate. Services, like auto and mortgage lending, are sometimes out of reach or just plain inconvenient to obtain through a smaller credit union. But, if permitted to create its own FOM, a credit union could make a lot of auto loans, for example, through a dealership. “Credit unions with a closed FOM are at a real disadvantage in that area.” Wirz said. “I think more and more that convenience is becoming an absolutely critical part of lending.” One Renaissance Commission suggestion that Wirz objected to was separating the NCUA from the National Credit Union Share Insurance Fund (NCUSIF). However, he did suggest that the NCUSIF charge credit unions directly to increase accountability. “I think accountability would increase if the NCUSIF charged a direct fee to credit unions for examination and ended the overhead transfer entirely,” he said. “State-chartered credit unions should pay for any examinations conducted for insurance purposes.” In response to his letter, Wirz received a letter from CUNA President and CEO Dan Mica thanking him for providing CUNA and the Renaissance Commission with his opinions and that they were looking into his suggestions. [email protected]

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