New dues formulas a sign of the times, new role of leagues

<p>SOUTHBOROUGH, Mass. – In the last three weeks, three leagues – Texas, Illinois and Colorado – revamped their dues formulas to allow for a dues hike for affiliated credit unions. Is this coincidence? Definitely not, say league executives, and CUs should expect to see more leagues make similar announcements in the coming months. “The new dues formulas and increased dues leagues are asking CUs to pay are a reflection of the reality of the cost of operating a league in today’s environment,” says Dan Egan, president/CEO of the Credit Union League of Massachusetts and the New Hampshire and Rhode Island Credit Union leagues, and chairman of the American Association of Credit Union Leagues. That reality is this, says Egan: Credit unions are turning to leagues to play an increased advocacy role in more forums than in the past and with more expertise. There are new expectations and pressure from credit unions for leagues to be active advocates in all forums, including state and federal legislators, and state and federal regulators. “It gets down to the expense of staffing and expertise,” said Egan. “Leagues either have to have people on staff or on retainer who have the increased level of expertise needed to work with leagues in their advocacy roles.” It’s also crucial to remember that many leagues’ dues schedules in existence have been around since the 1980′s, a time Egan noted, when the credit union landscape looked much different than it does now – there were more credit unions, and most of them were smaller than they are presently. “When the dues formulas were implemented in the 1980s, nobody imagined there would be as many credit unions with more than $1 billion in assets as there are now,” Egan said. Dick Ensweiler, president/CEO of the Texas Credit Union League said the league’s previous dues formula included a cap that limited the maximum dues any credit union would pay. He said that feature was included because “we were concerned the larger credit unions would not stay affiliated with the league if they had to pay more dues.” The new dues schedule, which will be fully implemented with TCUL’s 2004 dues, eliminates the cap and is calculated totally on assets rather than the current asset/membership-based formula (CU Times, May 1). The new dues formula will generate a $500,000 increase in the dues collected by the league in 2004 than it would have collected under the former dues schedule. “We’ve learned we have a role to play with the large credit unions just as we do the smaller credit unions,” said Ensweiler. “The league has to be able to grow as the credit unions grow.” Ensweiler said if TCUL delegates had not approved the new dues formula during the league’s recent annual meeting, TCUL would have had to cut back on some of its services. The league’s revenues had been flat the past several years, while its expenses increased. Before the vote was taken, TCUL hadn’t determined where possible cuts would have been made, but Ensweiler said if it had come down to that the issue would have been taken up during budget talks in November. Since the TCUL’s new dues schedule was passed, Ensweiler said he’s received requests from about five other leagues for details on TCUL’s dues proposal. “I don’t know if revised dues formulas are the ultimate solution, but leagues have to have some buffer to support future growth,” Ensweiler said. Egan advised credit unions that are affiliated with leagues that haven’t restructure their dues schedule in the last couple of years, to expect their league to propose higher dues soon. “If the leagues don’t, their dues base will fall short of the credit unions’ needs in the advocacy area,” he said. “Leagues won’t be able to be in all the forums credit unions need them to be in to protect credit unions’ interests, unless they have the large sums of money to pay for the expenses,” said Egan. -</p> <p>[email protected]</p>