WEST PALM BEACH, Fla. – Should credit union leagues allow non-affiliated CUs access to association services? The answer to that question may seem obvious to leagues and affiliated members, but there's also a lot of gray area that leave some non-affiliated CUs questioning their state league's policies. American Association of Credit Union Leagues Executive Director Susan Newton says the answer depends on the definition of `services.' "If you are referring to what we consider `association services' which would include things like compliance services, training and education, publications, certificate programs, league conventions and chapter support, most leagues do not provide access to non-affiliates, and those that do generally do so at an up-charge," she says. "On the other hand, if you're referring to services that are provided through the `for-profit' League Service Corporations such as data processing, credit cards, mortgage programs or auditing services, many leagues do provide these types of services to non-affiliates, and generally at the affiliate price," Newton adds. But even this isn't so clear-cut and it seems there are exceptions to every rule. Newton says most League boards give their CEOs enough wiggle room to make exceptions to non-affiliates and give the president authority "on a case-by-case" basis whether to allow a non-affiliate to use association services, even though "there's been more evolution on the League Services side in allowing non-affiliates access to services." For example, Rosie Holub, president/CEO, Missouri Credit Union Association says she'll invite non-affiliates to chapter meetings because "we want them to see the value of belonging to the league. We think of it as extending them the olive branch." MCUA has 98% affiliation. President/CEO Mike Beall of the Maryland Credit Union League which has a 75% affiliation rate, takes a similar position. "We look at it as on-going discussion leads to 100 percent affiliation," he explains. "My theory is we have to find ways to include non-affiliates in what we do so we can highlight to them what we do as a league." Beall says he's invited non-affiliated credit unions to chapter meetings "to get a taste of what's going on." As for attending the Maryland Credit Union League's annual convention, Beall says the League decides that on a case-by-case basis, "but we try hard to find a way not to say no." William Mellin, president/CEO of the New York State Credit Union League explained if the situation presented itself where the League was engaged in talks with a non-affiliated credit union to rebuild a relationship with them, the League would likely extend an invitation to that credit union to attend the League's Governmental Affairs Conference in Albany "to expose them to the benefits of belonging to the organization." On the League services side, Mellin said the NYSCUL's policy is "we welcome any credit union in New York State that wants to do business with us and don't charge different rates for affiliates or non-affiliates." Every new credit union in New York gets free-affiliation with the NYSCUL for the first 12 months after it opens its doors for business. Some choose to continue their affiliation after that, but others don't. Mellin said there have been several non-affiliated credit unions that paid to use the NYCUL's service side, saw the management style and reaffiliated with the League. "Credit unions that disaffiliate from their state league are disenfranchised from the direction the credit union movement is taking," opines Mellin. "I believe that the strength of the credit union movement is at the state and national level and what we have today, with CUNA and the leagues working together, is the best approach. I totally support the idea of a credit union being a member of their state league and CUNA." Aside from being allowed to avail themselves for a fee of League Services products, Mellin said non-affiliates are not allowed to participate in dues-supported League functions, not even for an up-charge. The NYSCUL's logic, he explained, is just as CUNA dues have gone up over time, League dues have as well and upcharging to attend an event can't offset the loss of revenue of a dues-supported organization. As for those credit unions that say they don't belong to the NYSCUL because of budgetary reasons and they can't afford the dues, Mellin says he wouldn't ever want monetary reasons to be an excuse for not joining the league. We'd find a way to work with them so dues weren't an issue, he says. "Membership definitely has its privileges," says Mellin, paraphrasing the American Express slogan. "We, like most leagues, are spending more and more dues dollars on advocacy. Even though non-affiliates don't contribute towards our dues dollars, when we talk to a legislator in Albany or Washington we say we're talking for all credit unions, not just the affiliated ones. If a credit union sees value in belonging to the League and knows what they get for their dues dollars, then they'll be willing to join and pay their dues." If affiliated credit unions of any league were asked why they belong to their league as well as CUNA, Newton says most of them would answer for advocacy and service reasons. "How do you put a dollar figure on that?" she asks. "We get asked by non-affiliated credit unions every year whether they can pay the registration fee and attend the GAC in Washington. The true cost isn't the $750 charge. What isn't factored in to that figure is the wealth of knowledge, contacts and experience that CUNA dues have paid for all these years for our lobbyists who can get members of Congress to come to the GAC to address attendees," says Newton. "All credit unions benefit from CUNA and our advocacy efforts whether or not they belong to CUNA. When we're on Capitol Hill fighting for credit union issues, non-affiliate credit unions are already benefiting," she adds. The Ohio Credit Union System has drawn the line in a different place in the sand. They revised their policy regarding non-affiliates last year and the new policy was effective Jan. 1, 2005. For the third time in the last five years, a membership affiliation task force made up of CEOs of OCUS-affiliated credit union took up the issue in 2004. Prior to implementing the changes, President/CEO Paul Mercer said OCUS opened up its products and services to non-members and added premiums to some fee-based services. Their reason was simple – Mercer said "it was a way for OCUS to maintain communication with non-members, partner with them when there was an opportunity, and it allowed us to show the value created by a well-run trade association. Those objectives drove our policy for about a decade." Eventually though, Mercer explained, "there was a significant number of potential members who were able to take advantage of our products and services without paying their fair share of membership dues. We wanted to have a policy that was oriented toward strengthening the trade association over time and ensuring that the benefits of the trade association were accruing predominantly for those credit unions that were willing to pay their membership dues to enjoy the benefits." Mercer said OCUA has an 83% affiliation rate and it's historically ranged from 82-86%. The OCUS membership affiliation task force voted to try a new approach that would let the trade association help its members understand its value. Now services related directly to the association part of OCUS are restricted to members. That means only affiliated OCUS CUs are invited to chapter meetings and the annual convention, and non-affiliated CUs aren't allowed to participate in marketing or cooperative advertising committees. In addition, only League members have access to all grassroots political and media programs such as Hike the Hill, governmental affairs conferences, and political fundraisers. OCUS non-affiliated CUs do have access to various Ohio Service Corp. (OSC) services such as the Ohio Shared Branch Network, Cooperative Real Estate Services, and the ICUL Services Corp. They're charged higher fees than affiliated-CUs on some of them. Although the new OCUS policy is only two months old, Mercer said reactions are mixed from both affiliated and non-affiliated CUs – a few non-members "don't see the wisdom" in the policy, and some members "are concerned about the need to sustain relationships with non-members." In Louisiana, a group of non-affiliated credit unions began meeting regularly to network among themselves. That group formed a local CUES council about two years ago that also includes some affiliated credit unions. Carol Irby, president/CEO and Charmain Bocage, VP of marketing, both of Riverland CU, New Orleans both belong to the Council. The credit union was affiliated with the Louisiana Credit Union League until 1964 when it chose to disaffiliate for several reasons. Irby takes issue with the fact that as a non-affiliated credit union, she's also locked out of being able to take advantage of CUNA's association/educational services such as being able to attend the annual Governmental Affairs Conference. Irby says she'd be willing to pay an upcharge to have access to CUNA's educational resources, "but we've been told it's on a case-by-case basis for non-affiliates, and if that's so then it's not an objective decision. CUNA policy should be across the board for non-affiliates across the country." Irby adds that, "What CUNA's policy means is that a credit union has to be affiliated with their state league even if they think the league is being run poorly, for them to be able to take advantage of CUNA's educational opportunities." Newton, who is also SVP, League Services for CUNA confirms that's what CUNA's policy means. "The strength of the three-tier system is we all stick together, it's not a pick or choose," she says. "It's a joint affiliation, belonging to a league and belonging to CUNA. There's a value for membership." Newton added that CUNA does not do upcharging. However, she said, "the board has given management discretion to make some association products and services available to non-affiliates if we think that providing services could promote affiliation." That holds true, for example, if a non-affiliate wanted to attend the GAC or CUNA's Future Forum. "If there's a credit union we know is working with a league and CUNA to reaffiliate and the credit union wants to attend those conferences, then we have the discretion to decide whether to allow them to." According to Newton, 92% of CUs' assets are affiliated with CUNA. But who decides whether a CU is interested in reaffiliating? Newton says all affiliation questions "are done in concert with the leagues. They're the ones on the ground collecting the dues." Newton says CUNA is aware it needs to tighten the implementation of its policy "to be sure it's being implemented correctly and consistently," says Newton, adding that the trade association "is looking into that." She explained that, "We've found where maybe our practices have fallen through the cracks on things we've put through on the open Web on what's for our affiliates exclusively. Now with so many things on the Web, there's room for misunderstanding. So we're tightening the way our policies on non-affiliates are being implemented." -

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