There are so many things credit unions want and need. Getting them is what keeps the individual credit unions and the dozens of credit union groups, especially the CU trade associations, running at top speed. But there are some things credit unions could do without. For example, every time I see a listing of credit unions that have the highest amount of their assets in investments rather than in loans to members, I cringe. What kind of message is sent to credit union enemies, politicians, and most important the members of credit unions that concentrate on investments? Take a look at the chart on page 21 of the July 20, 2005 issue of Credit Union Times entitled, “Top 25 Credit Unions in Investments as a Percentage of Assets (as of March 31, 2005 for credit unions over $50 million in assets).” It’s shocking! Not only the ridiculously high percentage and dollar amounts invested and the low percentage of interest earned, but the fact that a companion chart shows all the non-credit union related places these member investment dollars are being placed. These are credit unions? Or are they really just investment clubs disguised as credit unions? Interesting to note that five CUs on the list are connected to State Farm as the insurance industry takes aim more than ever at the banking (and credit union?) industry. Old timers will remember years ago a guy by the name of Wiley Barker, the longtime CEO of the long gone via merger TWA Club (credit union). It had a small staff because it did little other than invest the funds deposited by TWA Airline employees. The original plain vanilla credit union. Did they complain they belonged to an investment club? No, not when they were earning higher than average returns on savings. And at least this credit union admitted it was an investment club in its name. But as virtually all other airline credit unions took off, TWA, the airline and the credit union, was merged out of existence. Credit unions can do without credit unions that don’t earmark a logical percentage of funds to member loans. Also, with all the hubbub over NCUA’s refusal to allow two large Texas credit unions to convert to bank charters because they were not fully in compliance, has anyone noticed that the NCUA Board has not approved any credit unions seeking to convert to a community charter either, for at least 10 months? (See story on page 10.) This lack of board action on community charter requests is also something credit unions can do without. Speaking of NCUA, credit unions can also do without the CEO of a large credit union all but flat out calling NCUA Board Chairman JoAnn Johnson a liar in order to get his way in a controversial charter disagreement. And there is more. Credit unions can also get along without the too-large number of credit unions that foster an over cozy relationship between the board chairman and the CEO. One example of many: The chairman has been on the board over 35 years, 30 of which he has been serving as chairman. He and the CEO have become best friends, individually and as couples with their spouses. They do a lot together socially, sometimes on the credit union’s nickel. Review time has become a non-event. The chairman fully supports the CEO and vice versa even though on rare occasions they may secretly disagree. Although volunteer leaders and CU CEOs need to have a good working relationship, it can be carried to extremes whereby the members lose out. Credit unions can also do without credit unions that underpay their staffs. Doing so eventually harms the credit union. The good people get frustrated and move on. The mediocre, but especially the poor performers, put up with under market pay because they are realistic enough to know they won’t get hired by those credit unions paying at or above market. So they hang around and the members are forced to deal with disgruntled staffers putting in their time. Micro-managing boards are also something credit unions don’t need. Like the staff pay example above, the top notch CEOs take flight when they realize their board wants to do the job they get paid to do. Ever wonder why certain credit unions have had four CEOs in five years? Once the word gets out (and it does), these credit unions find it almost impossible to attract good CEO candidates. They eventually settle for less, someone who is willing to be micro-managed. Sadly, it never occurs to them that similar type credit unions are leaving them behind because they enjoy the winning combination of boards that determine what is to be done and let the how be up to the CEO and his or her staff. Credit unions can also do without wishy-washy politicians that jumped on the credit union bandwagon only to be pulled off a couple of weeks later. I am talking about freshman Congresswoman Gwen Moore (D-Wis.). As mentioned in an earlier column, Moore recently reneged on her co-sponsorship of the Credit Union Regulatory Improvements Act (CURIA). More recently she issued a statement that reads like a typical banking industry lobbyist press release. It is chock full of errors. Like her saying that the 99 (actually 104) credit unions over one billion dollars in assets don’t do anything for the less fortunate. Moore needs to see current CDCU report which states quite the opposite. She even trots out the old banker “fact” that any credit union over $100 million is not really a credit union. She backs that nonsense up with this familiar banker quote: “.there is concern that some of these enormous credit unions are acting more and more like traditional banks.” Assume she is referring to not-for-profit banks? I have no doubt that readers also can come up with their own list of things credit unions can do without. This is your invitation to let Credit Union Times know what they are. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail [email protected].

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Peter Westerman


Credit Union Times

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