Despite the misdirected scolding Credit Union Times Editor-in-Chief Paul Gentile gave me over my comment letter to NCUA, his Oct. 26 column is well written and includes some interesting observations. For example, the opening paragraph states, “I wish I could report that the credit union-to-bank charter conversion issue is going to fade away, but that’s not the case. Quite the contrary, it is poised to heat up again as still more credit unions look to make the switch.” The statement is 100% accurate. Credit Union Times should plan on covering this inevitable trend for many years into the future. Unfortunately, the column’s praise of the trade associations that have interfered in individual credit union’s business decisions to convert is way off target. Many leaders consider such direct intervention with a credit union’s membership by a trade association to be totally inappropriate. It irritates them that their dues are being used for this embarrassingly public interference in another credit union’s business. Just because the industry lobby has the well-oiled political clout to impose horrific impediments to an individual CU’s choice to convert, it doesn’t make such bullying tactics good public policy. Keep in mind that the Coalition for Credit Union Charter Options is not “making” these CUs convert to mutual savings banks. The CUs, leaders and their members make that decision on their own. The column also points to the banker associations’ sudden interest in the CU conversion issue. The bankers smell blood in the water and rejoice at the opportunity to leverage it to their advantage. They don’t have to be geniuses to figure out that since the anti-conversion forces are running around like chickens with their heads cut off, there must be a way the bankers’ lobbying agenda can benefit. Gentile suggested an anti-conversion public relations and media advocacy strategy based upon tactics that have worked in other venues for other industries. However, if implemented, this recommended plan can also turn into a double-edged sword. By inviting the scrutiny that these potential public battles over conversions are sure to attract, anti-conversion alarmists also make their opponents’ point of view at least as newsworthy. And they just won’t be fighting a CU that is hamstrung on what it can say by NCUA rules. What state or national banker association worth its salt could resist the temptation to get directly involved in the scuffle? With the growing specter of credit union federal income taxation, it seems particularly foolhardy to eliminate this charter conversion option as a potential exit strategy, even if it is intended only as a last resort. I have heard many a CU CEO say with brutal honesty, “If CUs are taxed, what good is the credit union charter?” That should be a sobering wakeup call to those who squander the industry’s resources on the wrong issue. Leaders of individual CUs are better positioned to chart their institution’s strategic direction than are the trade associations or NCUA. I unequivocally believe that advising the emperor (NCUA) that he wears no clothes, or that his bylaw is flawed, is an act of high patriotism rather than merely the observation of an alleged crackpot. Marvin Umholtz President & CEO Umholtz Strategic Planning & Consulting Services Castle Rock, Colo. (Editor’s Note: Umholtz is the membership director for the Coalition for Credit Union Charter Options.)

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