LOS ANGELES – Hubert Hoosman Jr. and Bert Beal put on the boxing gloves, climbed into the ring and slugged it out for several rounds. The gloves were real. The ring was the Grand Ballroom of the Radisson Wilshire Plaza Hotel in Los Angeles. The punches and jabs they traded were all verbal. The battle royal between Hoosman, president and chief executive officer at Educational Employees Credit Union in Bridgeton, Mo., and Beal, president/CEO of Dallas (Texas) Telco Federal Credit Union, was over the issue of risk-based pricing for credit unions. The debate was staged as part of the African-American Credit Union Coalition's (AACUC) fourth annual summer conference Aug. 10-11. Hoosman, chairman of AACUC, argued against risk-based pricing, contending that credit unions were straying from their original mission and becoming more like community banks. Beal countered that credit unions were businesses and needed to address the needs of individual members. "Are we a bank in credit union clothing?" Beal asked. "I think it's the other way around. We are a business in credit union clothing." Risk-based pricing will "allow our industry to move forward," Beal said. "Things change, philosophies change, but people helping people is still very much alive." "We've forced ourselves to think that we can't make these loans," Hoosman contended. "We've caved in to inactive, uneducated examiners, be it on the state or federal level." Helen Godfrey, president and CEO of Shreveport (La.) FCU and vice chair of AACUC, "refereed" the match. Supporters of risk-based pricing say the practice allows credit unions to offer "world class lending to blue chip members while at the same time charging higher but yet appropriate rates to less appropriate borrowers," Godfrey said. "Critics say it gets away from our basic philosophical roots," she explained. "It creates an elite member status for some members and different classes within our membership." Those arguments were at the heart of what was often a good-natured "point-counterpoint" between Hoosman and Beal. "We're trying to turn the `art' of lending into a science," Hoosman said. "We're too busy worrying about the bottom line." But Beal said risk-based pricing was a boon to credit unions and their members. Beal said loan denials at his credit union have dropped from 60% to 30% and that he was working to bring that number down even further. "I don't want to turn people down anymore," he said, adding that the credit union has experienced a jump in loan growth from 8% to 10% due solely to risk based pricing. Delinquencies over the past two years have fallen from around 2% to less than one-half of 1%, he noted. He said that members who in the past might have been turned down for a loan are now being approved and are telling friends and colleagues about the credit union, attracting new members. Hoosman, however, maintained that credit unions were "selling members out" by going to risk-based pricing. He argued that the criteria used to establish different rates was fundamentally flawed, contending that some long-time members with limited credit history were being forced to pay higher rates than they would without risk-based pricing. Further, he said, members paying higher rates were essentially subsidizing members paying lower rates. [email protected]