In the midst of all the hubbub of Lake Michigan Credit Union wanting to become a bank to be able to operate under an allegedly more liberal charter, an irony has surfaced. Another good-size Michigan credit union has switched charters. USA FCU, a $580 million CU is now USA Credit Union, a state-charter. The credit union made the change one year after credit union modernization legislation became law. Primary reason for the charter change was to take advantage of the newly enacted, more favorable credit union regulations that Lake Michigan Credit Union attempted to leave behind. Speaking of Michigan, it is also ironic that when most not-for-profit groups are finding themselves financially pinched and are seeking relief through dues increases, the Michigan Credit Union League board approved a one-time $500,000 dues cut. The reduction amounts to a 24% lowering of credit union dues, ironically already among the lowest among CU leagues. Meanwhile, over in Illinois, state officials have set their sights on diverting examination fees into the state's general fund to help alleviate a budget squeeze. Here the irony comes in two parts. First, apparently the governor of Illinois, the chief proponent of the action, hasn't a clue what might happen if he has his way. He need only look at Utah where unfriendly state actions pushed by banking lobbyists there caused a flight to federal charters and a substantial loss in fees that had previously gone into state coffers. Secondly, since the Illinois maneuver also impacts the banking industry, banks and credit unions have joined forces to fight the thinly disguised robbery attempt. How refreshing. Banks took time out from attacking CUs to cooperate with them against a mutual foe. And then there is this bit of irony: the Americans for Tax Reform organization has weighed in on ongoing attempts by the banking industry to strip credit unions of their long standing not-for-profit tax-exemption. In a recent statement by its president, the banker's efforts to tax credit unions were labeled as misguided and harmful to society. In other words, the "reform" in the group's official name apparently does not mean to seek ways to levy new taxes, but rather find ways to reduce taxes. Going a step further with the tax watchdog's logic, banking industry lobbyists trying to find ways to reduce the tax burden on banks is something they should put on a priority list in place of trying to tax credit unions and their consumer members. Another irony involves labor unions. While the CUNA Mutual Group and its union remain at loggerheads, CUNA has reached an agreement with the same union which also represents about 70 of the trade group's employees. And not long ago, the CUNA Credit Union (a misnomer since it is basically a community CU although its board is made up almost entirely of CUNA and CMG staff) voted to decertify the very same union representing a handful of its employees. Each year the BAI Retail Delivery Conference attracts more and more credit union participants. In a recent interview, the CEO of BAI stressed that they are not exclusively a banking organization. Some bankers attending apparently don't agree. They resent anyone with credit union on their name badge attending. Several CU attendees reported being told flat out by bankers at the meeting that credit unions have no business being there. The irony is that BAI no longer spells out its initials as Bank Administration Institute and gives CU participants a substantial registration fee discount. There was a time when sponsoring organizations/ companies were proud to have a credit union with a name very similar to their own. Of course, secretly they did worry a bit that if the CU faltered in any way it might reflect on the sponsor. How ironic that the current trend is just the opposite. Credit unions are becoming increasingly eager to shed their primary sponsor's name fearing that their difficulties, such as very public bankruptcies, might cast a negative light on the credit union. Another irony comes to us through the mainstream media which is reporting a number of blue chip companies seeking to dump or greatly reduce a potpourri of long standing employee benefits in an effort to stem the tide of red ink. These include substantial boosts in health care premiums paid by employees. Contrast that to CoastHills Federal Credit Union, a $425 million California credit union, that now pays 100% medical, dental, and vision premiums for its eligible 155 employees and their families. It would be further ironic if this was the start of a new CU trend. Another CU difference? Bank lobbyists attempting to position themselves as the consumers friend need to keep in mind a widely reported recent request by the Consumer Bankers Association (CBA), a national banking industry trade group, that would not benefit consumers living in the state of Wisconsin. While Badger State residents have embraced the chance to get annoying telemarketers off their backs, CBA has asked federal regulators to overrule a section of Wisconsin's popular no-call list and replace it with less restrictive rules. One lawmaker responded to the request by saying, "No way. The state law is the toughest in the nation and bankers don't like it." Guess banks will have to continue to rely on the standard junk mail system for their one-a-day (or so it seems) credit card et al promos. Then there is the annual irony which occurs every time the "hurt-by-CUs" banks release their earnings reports. Among the latest: National City Corp reported fourth quarter net income up by 76%, while Bank of America saw a 41% increase during the same period. Meanwhile the Kansas Bankers Association convinced that state's financial institutions regulator to have state chartered credit unions audited. Since the same regulator covers both banks and credit unions, wouldn't it make more sense to audit banks to determine why they continue to achieve record-setting profits? Maybe the bureaucrats in Kansas (and elsewhere) need to see a copy of the January edition of Smart Money Magazine, the Wall Street Journal's personal finance publication? It contains an article entitled, "How To Dump Your Bank," which explains not only why but how. How ironic! Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail [email protected].

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