Paid registrants at the annual CUNA Governmental Affairs Conference might find themselves sitting next to a representative from a credit union not affiliated with its league and CUNA. Ever since I can remember, credit unions that did not ante up annual membership dues to the state league (and thus CUNA) were shunned and subjected to private and public verbal abuse. Nevertheless, a handful of non-affiliates will probably be at the GAC because some leagues allow it, either across the board, or on a case-by-case basis. On the other hand, it is a sure bet that some non-affiliated credit union representatives will not be there, even though they badly wanted to attend and were even willing to pay a premium registration fee for that privilege. Unfortunately for them, they hail from a state where the league (often the CEO) said no way. This nonsense has been quietly going on for many years. Whether or not non-affiliated credit unions are welcome to participate in league, chapter, and CUNA events is purely at the discretion of the league staff and or board. CUNA itself tries to stay out of the fray by declaring such go or no go policies are strictly decisions that the league should make. But CUNA does sell stuff to non-affiliates although on an inconsistent basis. Besides making no sense that geography determines whether a non-affiliated credit union (I really prefer the term “potential member”), can participate in any CU educational events, the procedure in place is not legal. The system in place could have an adverse effect on a credit union association’s not-for-profit status. Why should a credit union be allowed, or not allowed, to participate in a conference based strictly on whether it is located in a state with a strict or flexible policy? It shouldn’t. As I have been saying for years, a big part of granting an organization its n-f-p, tax-exempt status is that the group agrees to serve all those within the category of membership it has identified as its mission. Thus, it cannot categorically deny participation to any entity that qualifies as a state or federally chartered credit union. Yes, a higher fee can be charged to non-members, but it cannot be exorbitant or substantially higher. In my opinion that is as it should be. If non-affiliates pay the same as members to attend a conference, why bother being a member? Like it or not, believe it or not, the fact is, no not-for-profit, tax-exempt credit union organization can prevent a non-affiliated credit union from participating in its educational events. It is not permissible for the leagues to set individual policies, or for CUNA to adhere to such inconsistency when it comes to providing educational opportunities for representatives of any credit union. But don’t take my word for it. A credit union in Louisiana has been fighting this battle for years with no success. That league is adamant that non-affiliated credit unions cannot participate in anything the league or CUNA does. Ironically, the Louisiana credit union CEO is not anti anything. She previously worked for a CU in another state where she was very active in the league, serving many years as a state volunteer board member. She and her board believe in the need for credit unions to work together. The CU participates in numerous NAFCU, NASCUS, and CUES events. These groups do not have policies like CUNA. For several strong reasons of their own, this credit union just does not want to be a member of their state league. Thus, by league policy, for years they have been shut out of many worthwhile learning experiences such as CUNA’s GAC. Recently, a Louisiana league staffer wanted to attend a meeting of the local CUES council to which this CU CEO belongs. The council said fair play is turn about so the league staffer was told no you cannot attend. The league CEO complained to the CUES CEO who decided to have a lawyer sort it all out which she did. Guess what? The CUES council was told it could not legally bar the league staffer from participating for the same reasons as outlined above. Here’s some of what the lawyer said in her January 10, 2005 letter to CUES: “.the anti-trust laws of the United States require trade associations to treat similarly situated persons and entities in the same manner. Trade associations are permitted to establish broad categories of persons and entities, and to impose differing treatments among categories of persons or entities. Within the same category, however, persons and entities must be treated the same.” It seems clear from this that credit unions are a category and must be treated the same. It further indicates that credit unions in one state cannot be treated differently than credit unions in another. Or putting it another way, if some non-affiliates can attend a league or CUNA conference, all credit unions must be afforded that same opportunity. The “different treatment” implies charging a higher non-member registration fee and not allowing non-members to vote or hold office. A further rather telling quote from the lawyer: “Trade associations are not permitted to establish categories based on personal likes or dislikes, or the desire to advantage one individual or company above others.” She goes on to say that the recourse to inconsistent treatment of those in a like category is a formal complaint to the Federal Trade Commission. It is long past the time when leagues (and thus CUNA) policymakers must closely examine the hodgepodge of policies they have in place to deal with non-affiliated credit unions to make certain they are not in violation of FTC rules. They need to do so before that first formal complaint is filed. As for individual league CEOs playing God and deciding which CUs can and cannot participate in league and CUNA sponsored educational events on a case-by-case basis, it should now be obvious that such practices are definitely not in compliance. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail email@example.com.
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