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LENEXA, Kan. – At press time, corporate credit union CEOs were still in the evaluation phase of a recently-released U.S. Central proposal to revise the board’s structure. This issue was taken up at length at the Association of Corporate Credit Unions’ recent annual meeting in New Orleans. U.S. Central President/CEO Dan Kampen said he was elated by the open minds and dialogue surrounding the board changes, a potentially controversial topic. “It’s been eight years since we’ve had this type of discussion, and I can tell you with all honesty the discussions were always well-intentioned,” said Kampen. It looked like there might be a clash as a group of larger corporates was advocating a seven-person board consisting of solely corporate CU CEOs, while U.S. Central wanted to expand the board from nine to 11. The current proposal maintains a nine-person board, but adopts a tiered capital system (broken into thirds) for seven corporate CEO seats. Two of the seats will be occupied by corporate CEOs from corporates with the largest capital levels in U.S. Central; two by corporate CEOs in the second highest capital level; and two from the third highest. The last corporate CEO would be an at-large seat. In all cases, all corporates will vote for all seats – votes will not be broken down based on capital levels. U.S. Central stressed that this is still just a proposal and the tiering could be changed. For example, there was some discussion of having four capital levels instead of three. The remaining two seats on the board go to U.S. Central’s non-corporate credit union members, such as trade associations, leagues, CUSOs, etc. Even though corporates dominate U.S. Central’s balance sheet, Kampen feels that in these times of banker attacks, UBIT audits, and other national issues, system unity is needed at U.S. Central. One group that will no longer be on the board is credit union CEOs, which as directors at corporates, used to be able to serve as Class B directors. The non-corporate members would be nominated and elected solely by U.S. Central’s non-corporate members. Credit Union Times canvassed corporate CEOs to get their reaction to the proposal. “I’m in favor of adding more corporate folks to the board, but as far as tiering I don’t see a need for that. If we have to have tiering then make it one seat in each category and have four at-large directors,” said Pete Pritts, president/CEO of FirstCorp. Pritts said since all corporate leaders get to vote in all categories, tiering makes even less sense. Pritts said he is very much in favor of the two non-corporate board seats. “The outside viewpoints are good, other levels add to the decision making process,” he said. TriCorp President/CEO Steve Roy likes the current proposal and believes that an all corporate CEO board, advocated by some corporates, would have been a mistake. “Fred Becker was at the ACCU meeting in New Orleans and he described corporates as being the hub of the payment system . What we do at corporates affects everyone. Given that type of importance I don’t think it’s a bad thing to have reps from other aspects of the credit union system. Corporates are still going to have a very representative voice on the board. It’s a good compromise,” said Roy. Louisiana Corporate FCU President/CEO David Savoie said he has no major problems with the proposal, but he is not a proponent of dividing the board by asset size or capital. “But I like the fact that all corporates vote on all seats, and I’m okay with the nine-member concept, so as it stands I would not object to the plan as it is currently structured,” said Savoie. Savoie said the proposal is lacking in terms of what happens to the board seats of merging corporates. “This situation can cause one corporate to have effective control of two votes. I think this situation needs to be addressed as early in the merger process as possible,” said Savoie. VolCorp President/CEO Bruce Fahnestock is thrilled with the proposal. “I love it. I like that each different tier size gets the same number of votes, and I like the two non-corporate seats. We need to not live in a vacuum,” said Fahnestock. Doug Wolfe, president/CEO of Midwest Corporate FCU, said he would approve the current proposal. Wolfe said after sitting in on the ACCU meetings he is convinced that large corporates aren’t trying to have more influence than other corporates on the board. “I could tell at the meeting that their intent was not to dominate. I’m very comfortable with everything. It ensures that corporates of varying sizes of operations will have seats at the table,” said Wolfe. U.S. Central’s Board structure isn’t top of mind for some corporates. CenCorp President/CEO William Walby said it’s not a high priority for his corporate, yet he is glad that the board is making the discussion open for all corporates to give input. “I think you can argue about some very minor things in there. The (U.S. Central) board is in the best position to evaluate what’s the appropriate structure for U.S. Central,” said Walby. [email protected]

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