I must be in too deep. Maybe I am too entrenched in this industry to have a realistic view of what's going on. Is it me or are these credit unions that are attempting to convert to banks just completely blind about what it takes? Or maybe they're just very arrogant?

They just don't get it, and I don't get how they still don't get it! Have they not learned from the many past lessons of failed conversions?

Once again we have a conversion attempt embroiled in controversy. The conversion of the $320 million Lafayette FCU based in Kensington, Md., has been derailed. (That's great news by the way because when credit unions convert to banks, members lose in the long run.)

The credit union's leadership had a very short-lived victory. One day they are announcing that the conversion was approved by its members by a razor-thin margin of 18 votes. A week later the accounting firm that certified the vote turns around and decertifies it!

Let's look at where Lafayette went wrong, and it starts at the top. The CEO was nowhere to be found. For a leader who was apparently 100% behind the reasoning for the conversion, he did nothing to get the word out beyond the required regulatory notices. He shunned the press. He backed out last minute of an event where he could have taken on critics of the conversion head-on in a public forum. He could have stood up for everyone to see and proclaimed the great wisdom behind the conversion. He didn't. He hid throughout the process, and that's a shame.

It's a shame for him and the credit union. If he truly believed in the reasons behind it, he should have enlightened all of us and maybe he could have built momentum. What's amazing is this tactic of avoiding the media and members in a public forum has been tried in the past, and it's failed.

What's troubling about a reticent CEO in the conversion process is it puts the onus on the regulator to create more dialogue with members. It shouldn't be that way. In the democratic spirit of what a credit union is, potential converts should embrace dialogue and invite it even.

If these pro-conversion groups out there, and they're out there, were smart they would go find themselves a model convert, similar to how lawyers look for a model subject for a potential precedent-setting lawsuit. Get a credit union with a dynamic leader who truly believes in the conversion. This CEO would be very vocal, taking the case to all who will listen. They won't avoid the spotlight; they will use it to talk about the flaws of the credit union charter and how the future of credit unions is in danger because of the charter's limits.

I don't want to see another credit union convert, and if they keep getting handled in the fashion of Lafayette, conversions will dwindle, but if it does happen, a stand-up CEO would be good for both sides. I would love to see someone give the charter limits argument, which many CEOs talk about behind closed doors, the public forum it deserves. That would put more pressure on Congress and credit union leaders to make the charter even better.

But maybe I am dreaming. Maybe this model CEO isn't out there because most of these converts don't truly believe in the reasons for converting. Take Lafayette. From the limited information we have on their conversion attempt, business lending was a prime reason. The problem with that is they are nowhere near the MBL cap. Maybe greed is still the motivator for conversion and that's certainly not going to bring this ongoing conversion battle to a higher plateau.

Back to the actual vote. The vote may have been decertified because of some allegations from members that the credit union didn't inform all members equally about branch voting and about the voting deadlines. Come on Lafayette. If that's true, you make all credit unions look bad. To think that a credit union, built on democratic principles, would engage in those tactics is a black eye for all.

And finally, talk about a prime example of “every vote counts.” A mere 18 votes was the margin of approval in the now decertified votes. I advise those entities fighting a conversion to use Lafayette's short-lived narrow victory as a rallying cry to get more members to participate in the vote. Clearly, every vote counts. –Comments? E-mail [email protected]