Whenever credit union groups meet, it is almost a certainty thatbefore the event concludes an award presentation of some kind willhave taken place. Credit union folks love to give and receiveawards. Yet one important award is never presented, but should be.Guess I'll have to do it. I call it the Stupid Award. Pretty harsh?Yes, but while others just whisper about those who should berecipients for this new award, I decided to stick my neck out andsingle them out. Without question the first Stupid Award must go toall those credit union members being led by the nose by greedyCEOs, management staff, and boards to vote to convert their creditunions to a bank charter. It's not the staff and board who arestupid. They know exactly what they are doing and what they canexpect to get out of misleading their memberships. No, this awardbelongs strictly to the members voting yes. Several years back, theCEO of what was at the time a credit union seeking to become abank, reacted angrily to a column I had written. I more than hintedthat just maybe his credit union's members didn't really know whatthey were voting for or against. "Are you calling my membersstupid?" he asked me. "No," I said at the time, answering hisquestion by asking one of my own: "But can you tell me for surethat your members know exactly what a charter change will mean tothem personally?" As expected, he countered somewhat belligerently,"Of course they know because we explained it to them." It should benoted this all took place before NCUA tightened up its disclosurerequirements. At the time I didn't argue any further, but shouldhave because what I feared was going to happen down the road hashappened big time. Am I still the only one who thinks most membersat credit unions trying to jump ship haven't a clue regarding whatthey are voting on and worse, really don't know any specificsregarding how such a move is going to hurt or help them when thebank shingle is hung out? Think about it. Credit union membersaren't all that different than all of us who have receivedcomplicated legal documents, say from a mutual insurance company,as a policyholder asking us to cast a vote on something we don'tunderstand, or don't want to bother doing our homework on beforevoting. These people, and that includes me, should also get aStupid Award. What usually happens is we either toss the votingpacket aside deciding not to vote on something that appears toocomplex to bother with at the moment, or take a more common action.We vote yes figuring if the board and management of thisorganization want my support (which they clearly ask for), that'sall I really need to know. Why should I wade through all thatboring information? After all, company officials are where they areto protect my interests as an owner of the company. They certainlywouldn't propose anything not in the best interests of the companyand its owners, would they? That's the point. Credit union membersasked to vote to change charters trust those making the proposal,even when it is manipulated. Like me and other stupid insurancecompany policyholders, they feel they are in good hands. They don'task, nor are they told, what the specific benefits will be to thempersonally except in the broadest of terms. Oh sure, they are givensome gobblygook having to do with an alleged need for more capitalto grow, better rates and service, etc., but nothing reallyspecific. They are never told, for instance, that they will be ableto get bigger loans at better rates in a more convenient way. Whynot? Because that's not what happens when a credit union switchesto a bank charter. Members get nothing. The CEO and his or herstaff and their boards on the other hand do quite well. This is notabout the right of members to vote to become a bank. That's agiven. This is about members really and truly knowing what theirvote will mean to the credit union and to themselves as anowner/member before they cast their ballots. Without knowing that,voting to convert is a stupid move. There is no polite way to sayit. Hence the Stupid Award. If the big benefit went to members, Icould understand the CEO of Community Credit Union in Texas seemingto be working full time to become the CEO of a small bank. Theefforts made by him, his board, and others employed by or hired bythe credit union to orchestrate a plan to abandon their own membersfor personal gain is astounding. The costs (prizes and othermarketing initiatives, multiple law firms, multiple consultants,voting and possibly re-voting, related travel, lobbying at thestate and national level, staff time dedicated to the cause, etc.)to members currently and down the road are embarrassingly high.(Fact: The failed Columbia conversion cost members over $1.2million.) Community CU continues to act like NCUA doesn't have anysay so in the matter. At times the CU's leaders even give theimpression that the credit union can just thumb their collectivenoses at NCUA and go on their merry way towards becoming wealthy.Think I am exaggerating? Someone tell me what any one member, justone, has gained from his or her credit union becoming a bank. Makesure that what is cited is something above and beyond what theywould get by remaining a credit union member rather than becoming abank customer. The sad truth is, members voting yes, those votingno, and those not voting at all (the majority in every case) allgot nothing. That's why members voting yes deserve the StupidAward. And if the NCUA Board bows to the enormous Community CUgenerated pressure being foisted on them, later there may be anaward for them as well. Comments? Call 1-800-345-9936, Ext. 15, orFax 561-683-8514, or E-mail [email protected].

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