ST. LOUIS — Acknowledging the impact of the current economy on small credit unions, the Missouri Credit Union Association is considering a reduction in dues next year.
The proposal–approved by the trade group's board of directors at a Feb. 4 meeting and to be voted on by the membership at the annual meeting in April–would shrink the dues expense for some member CUs as much as 17%.
"We recognize the economic pressures and increasingly tight margins that credit unions face today," declared MCUA President/CEO Rosie Holub in a statement explaining the dues proposal.
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"The league," she said, "is adequately capitalized and in a position to demonstrate the cooperative spirit. The board felt it was appropriate to do what we can to help support those member credit unions that support us."
The statement said member CUs would vote on a change in the dues formula at the organization's annual business meeting April 1 in Jefferson City. Dues would be based on the mid-year 2008 NCUA 5300 reports, said Holub.
Dues income currently makes up 25% of the total budget, which includes league operations and its service corp., said officials. Dues are based on the mid-year 2008 NCUA 5300 reports.
It was uncertain whether leagues in other states that have witnessed troubled times for some small CUs might follow Missouri's lead. Holub herself stands in a national leadership position having moved up last month to chairman of the American Association of Credit Union Leagues during its annual winter meeting in Naples, Fla.
Asked for comment on the MCUA dues plan, AACUL Executive Director Susan Newton said the proposal "I'm sure, will be appreciated by its members. Whether other leagues decide to move in a similar direction remains to be seen. Each league will make its own decision as it sees fit."
"Leagues," she said, "base their dues not only on their financial and capital position but on their advocacy and service objectives, the size and makeup of their CU membership base, and many other factors both internal and external."
A sampling of other league CEOs echoed Newton's views with same claiming that changes in dues formulae in recent years indeed helped ease the financial burden for small CUs.
"We went for the square root formula five years ago," a change greeted favorably by small CUs, said Wendell Lyons, president/CEO of the Kentucky Credit Union League. Now to keep a lid on future dues increases, the job for league management, he said, is "to watch our expense ratios" and keep costs down, he said.
John Annaloro, president/CEO of the Washington league, said a new dues formula adopted in September 2006 reduced dues for CUs under $10 million in assets by 50%. A quarter of all Washington State CUs benefited from this dues relief, he said.
Moreover, the Washington league is fortunate to have very large supportive CUs that would be "very happy" to step in to protect the smaller CUs if times got tough, he said.
Apart from the immediate dues cut plan, the Missouri league said that in a separate action the board of its Credit Union Partnership unit approved a rebate of some $125,000 to be paid by MCUA's League Services Corporation. The rebate is based on final figures of audited financials and is typically distributed in April.
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