DUBLIN, Ohio -- Nearly two years in the drafting stage, the Ohio Credit Union League is looking for a dues increase and restructuring to start in 2008.

The league leadership explained the dues hike is needed to pay for higher lobbying and ad expenses with the overhaul of assessment rules aimed at "reforming" antiquated policies.

The actual size of the proposed dues increase was not disclosed "until we complete the dialogue with our members," said Paul Mercer, president/CEO.

In removing some dues caps and equalizing assessments, the league did say that it plans to adopt the so-called "square root of assets formula" on dues payments used by other state leagues and which focuses on charging members based on existing budgets.

"Designed as a lasting solution, the proposal will spread the investment in league funding across different size credit unions in a more proportional, fair, and equitable way," said an article appearing in the league's July 7 "eLumination" newsletter.

In the e-mailed publication, the league board said a mail ballot vote of the proposed dues structuring would be conducted early next month "and conclude in early September" with conference calls and town hall meetings in between. The conference calls for different size CUs will be held July 25-30. No schedule was listed for the town hall sessions.

In describing the dues changes, the board said the "square root" model is meant "to carry the league into the future with confidence."

Under the model, the square root of a CU's assets is given a "multiplier to attain the dues target," but the board would first "set the dues target level via the annual budget and decide a maximum factor, a cap, for smaller credit unions, and then the appropriate multiplier required to achieve the target would be determined."

Jennifer Ferguson, vice chair of the league and president/CEO of the $45 million Bay Area Credit Union of Oregon, Ohio, a Toledo suburb, said dues changes have been discussed by the board "for the last couple of years" and it was formally decided last spring to go forward with a restructuring plan.

The last time the league opted for a dues increase was in 1999, voted on that year and adopted in 2000.

"There were lots of reasons to go ahead with a dues increase, in part because the league was simply not sustaining itself under its existing budget," said Ferguson.

In addition, both large and small CUs complained about inequities in the old formulas with small CUs arguing they were paying too much based solely on members or assets.

The "square root" formula has been used successfully in other states, she said. The "eLumination" newsletter cited its adoption by the Washington, Colorado, and Texas leagues noting the model "does not include a cap for larger credit unions."

Ferguson said Ohio, like other leagues, is facing an array of "challenges" in trying to do its advocacy job in the state legislature as well as in Washington and in addition supporting financial literacy projects across the state.

She said reaction from the 400 members to the increase and restructuring has been positive. Since the latest newsletter went out, "I haven't receive a single negative comment," she said noting the league board is encouraging members to speak out on the issue so the board can settle on the optimum formula.

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