In his October 10 Credit Union Times opinion essay, former CUNA Chairman Yuri Valdov contends that dropping his credit union's membership in NAFCU, thereby enabling CUNA to be the sole national voice for credit unions, will somehow cure all of the industry's ills. He couldn't be more wrong. Credit unions need more trade association choices, not fewer.

As the CEO of $1.5 billion asset Virginia-based Northwest Federal Credit Union, Mr. Valdov certainly has the right to choose which, if any, of the credit union trade associations he supports. The fatal flaw in his thinking is that the best interests of credit unions will somehow be served by a "unity of voice." He assumes that all credit unions want the same future that he envisions. They don't.

Mr. Valdov may not want to admit it, but the credit union industry has irreversibly evolved into two conflicting camps...the "movement purists" and the "industry pragmatists." These conflicting visions are irreconcilable and no credit union trade association in existence today has effectively responded to this compelling shift in membership attitudes.

Credit union purists see themselves as a movement that is cause driven. They vigorously enforce traditional philosophy and reward those who espouse it. They have rigid socio-political expectations for the credit union charter and are often perceived as far to the left-of-center when it comes to public policy. It's a self-perpetuating, inwardly focused system that is not open to outside ideas or responsive to competitive realities.

Credit union pragmatists are driven by business issues and recognize that a credit union is a locally focused financial institution, not a socio-political tool. They believe that each credit union should make independent business choices and not be told what to do by a centralized aristocracy. They see fairness and social responsibility as a corporate objective, not a reason to be. They want to do what it takes to succeed in a marketplace that rewards competence and innovation.

NAFCU and CUNA are both overwhelmingly dominated by and governed by the movement purists' camp, leaving no voice for the pragmatists. Killing off one or the other national association will make absolutely no difference concerning who is calling the shots. The controlling purists' current strategy is simply to shout down non-conforming views, leaving the pragmatists disenfranchised and frustrated. That's a strategy that is doomed to explode in their faces. It's simply a question of when.

The credit union industry would be better served if both the national trade associations genuinely accommodate the diverse points of view held by the many fiercely independent credit union pragmatists whose representation needs are not currently being met by the purists' agenda. If the national associations don't respond, new credit union trade associations that cater to the pragmatists' expectations will surely come to be. After all, wasn't NAFCU's emergence decades ago due to the credit union movement establishment's refusal to effectively address the diverse views held at that time? Perhaps those whispered rumors about the impending launch of a new trade association, the Independent Credit Unions of America, are true after all?

Marvin Umholtz

President/CEO

Umholtz Strategic Planning & Consulting Services

Olympia, Wash.