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In David Adams’ letter to the editor in the Jan. 18 issue, the CEO of the Michigan Credit Union League states “I know that I invite criticism.” Well, I have some for him. His pleas for “fairness” in the conversion process show contempt for the integrity of the regulators and the boards of directors charged with ensuring the process is fair, and members are well-informed. Moreover, his solutions to improving fairness (more fully articulated in the anti-conversion policies of MCUL and the American Association of Credit Union Leagues) amount to tilting the playing field so severely against conversions that, if such rules were imposed on board elections, or state-to-federal (or vice versa) charter switches, or deposit insurance conversions, or mergers – in fact, on any decision involving a membership vote – they would freeze credit union governance in its tracks. Those points aside, my primary concern with Mr. Adams’ “recommendations” is his desire to abolish raffles in conversion votes. Citing my public relations advice to converting credit unions, Mr. Adams takes umbrage at raffles designed to motivate greater member participation in a vote. He calls them “gimmicks.” He fears they encourage uninformed voting and a bias toward `Yes’ votes. I could point to his own use of raffles as evidence of his glaring hypocrisy. Not only are raffles commonly used by credit unions and leagues to draw even modest participation at annual meetings, the MCULLAF Grand Raffle has been a time-honored tradition to solicit contributions for the Michigan league’s PAC since 1991. Their latest prize is a 2006 Mustang or $20,000 in cash. As the Credit Union Times reported in January, “The MCUL continues to put its money where its mouth is on the importance of incentives in encouraging response.” Let’s examine why raffles or other incentives are important to credit union democracy. Without broad participation, the power in a cooperative devolves to a vocal minority – the same 50 to 100 stalwart members and employees who always show up. The `silent majority’ of members is effectively marginalized by its disinterest. Thankfully, the collective decisions of the loyalists are mostly benevolent or benign. Yet, for a decision as important as charter conversion, boards of directors and management have the responsibility to ensure everyone’s interests are well represented, not just those of an active minority. Research shows us, however, that the average credit union member cares little about the ancillary ownership and voting power that come with belonging to a cooperative. A 2005 Gallup poll conducted for a large U.S. credit union revealed members were interested in value (fair pricing), great service, competitive products and convenient access. Only 20% of respondents rated ownership as important. It seems the vast majority of credit union members don’t care about governance matters, or their limited rights as owners. And they certainly don’t want obligations. Raffles act as an incentive for the silent majority to step up and vote in a charter conversion. And conversions affect the things these members do care about: new branches and expanded product suites. By attracting attention to the voting package with a raffle promotion, and offering a chance to win a prize as compensation to members for their investment of scarce time in reading through a hefty set of disclosure documents, boards of converting credit unions accomplish two things: (1) they reduce the likelihood of the package being ignored, like so much direct mail; and (2) they help to produce an outcome that is more reflective of the will of the entire membership. Arguing to limit raffles is another shameless incursion by leagues into the rights of a board to self-govern its institution. Mr. Adams is right to invoke criticism in his opinion piece. He deserves it. George E. Scott Principal Level Five Strategic Partners Inc. Mississauga, Ontario, Canada

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