One of the regs would give a group of members more access to inspect credit union books, records and minutes. The request must be made by a minimum of 20 members and a maximum of 250 so no single yahoo can get access to records. This rule has safeguards. Credit unions don't have to give out the codes to the safe or the alarm system–the request must be related to a credit union business purpose. Further, the credit union has the right to dispute a request if it thinks the party requesting the information, like a group of potential takeover artists, is out to harm the credit union. Ironically, NAFCU said in its comment letter that state corporate law is sufficient for access and it does not need to be federally regulated. Do we forget it was a state judge in Michigan who was not compelled to grant DFCU Financial members their request for a special meeting even though they garnered enough votes?

Interestingly, NAFCU also said there is no "widespread cases of an egregious lack of FCU transparency." Funny, the one, single hostile takeover attempt certainly wasn't widespread, but NAFCU was the first to ask NCUA to jump into the boardroom and stop it. I still believe hostile takeovers must be addressed, but no one can argue that it's a widespread problem.

On to the second proposal, which would require credit unions to disclose merger related compensation for board members and senior management officials. The proposal would require credit unions to disclose a 15% increase or $10,000 in compensation to an official's current compensation as part of the merger disclosure. CUNA said, "the proposal could have a chilling effect on mergers, which are often positive transactions that benefit credit union members."

A chilling effect? I doubt it. If an official is getting a million dollars to merge, sure the effect would be chilling, but what are credit unions hiding? There is no problem with officials being compensated for mergers, especially mergers that will benefit the membership. Compensation reflects their hard work over the years and the work it takes to get a merger done. But if big dollars are being thrown around to get the deal done, members should know about it.

Again, it's transparency. It's the members' money isn't it? Why should members get to know what executives would make in a conversion deal but not a merger? Both events are dramatically changing the institution. I think I know the fears with this proposal. There are stubborn boards and CEOs out there leading struggling credit unions who don't want to merge. Despite falling ROA, losing members, and a bad bottomline, they want to hold on to that credit union. They need to merge for the good of their members, but they can't part with their control. That's bad leadership. That's unfortunate. In some cases a handsome payout might spur them to give up that control, but you can't oppose a transparency reg for this unfortunate circumstance and does this type of leadership deserve a hefty payout? Let's get this information on the table.

I do think 15% or $10,000 might be too low, but NCUA is still evaluating comments and could adjust this number upward. That's what credit unions should be pushing.

Make no mistake, banks are much more transparent than credit unions. You can find out what bank CEOs make. You can't do the same for credit unions. If it's all about the members as credit unions say, shouldn't they be able to get their hands on more of this information?

Finally, I think credit unions are worrying about a problem that doesn't exist. These proposals wouldn't open any floodgates. You wouldn't see a rush of groups of 20 or more asking for the minutes of the last board meeting. These regs are just good practice for a cooperative industry that sells itself on Capitol Hill as being all about the members. Are we instead going to find out there's a good old boy network out there doing things for its own good? I don't think so, but opposing these regs has me wondering.

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