Conversion to the mutual charter is a legal option opposed by NCUA bureaucrats, some trade association executives, a few wooly-thinking credit union managers, and even the trade press. But, it was not long ago that independent-minded credit union executives investing in government securities, mortgage lending, investment services, business lending, and even charter expansion generated a similar outcry.

For those new to the routine, let me illustrate. In the 1980s, credit union executives started to invest in government securities. They were promptly scolded by trade association executives saying it was too dangerous, that handling surplus cash wisely was the job of the corporate. Plus, the activity was too bank-like and would lead to taxation. Of course, those were days when the league and corporates were indistinguishable. The leagues depended on their corporates to pay a lot of the bills.

Mortgage lending got the same unwelcome reception. These complex transactions are the job of CUNA Mortgage, the critics said. A credit union could not hope to do this competently on its own. Meanwhile, NCUA warned that holding more than 25% of these "risky long term loans" would mean extra scrutiny, visits from special teams, and a nervous board! Plus, making big dollar loans was contrary to the credit union philosophy! The same Chicken Little scare tactics held credit unions back from investment services, business lending, FHLB advances, and other flexible responses to a changing financial services marketplace. And today, the defenders of the faith have turned a mutual conversion into blasphemy. They use member money, in dues and assessments, to build a wall around the industry through fear, intimidation and misdirection. This is endemic to how they see their jobs today. Even Dan Mica has taken to attacking the Office of Thrift Supervision, fearing its ongoing efforts to modernize the OTS charter could cause more credit unions to convert! But what are the risks if credit unions don't keep pace with their members' changing needs? Opposition to earlier innovations caused some credit unions to come to the marketplace reluctantly and late. Falling behind will be fatal for many as they take inordinate risks in an effort to keep up with unprecedented margin contraction. And many laggards are going to give up and merge, willingly or not. What about today's challenges? Will credit union leaders have the courage to make tough strategic decisions in the face of the critics? I think they will. Most leaders will decide the credit union charter suits their members' needs well. That's fine. As long as the choice is made with eyes wide open, not blindly. But wouldn't it be smart, as the options are weighed, to have as many options as possible? After all, the consumer's needs are changing relentlessly, and at an accelerated pace. Who knows what the future holds for credit unions? There is simply no case for discarding a legitimate charter option because turf-protecting bureaucrats consider it threatening. After all, where would we be as an industry today if we had taken their advice on every other product or service innovation that came along in the last 20 years? Alan Theriault CEO CU Financial Services Portland, Maine (Editor's Note: CU Financial advocates for the conversion of credit unions to banks and has played an integral role in many of the conversions thus far.)