The author of a new paper from the CUNA CFO Council wants to help credit unions better understand the levels of capital they need to remain not only safe and sound but also competitive as well.

Dr. Harold Sollenberger, an accounting and information systems professor for Michigan State University, said credit unions need to have an internal process to give them the same sort of feedback on capital that stock-issuing firms get from the market.

"The credit union dilemma is that no similar equilibrium-finding process exists. No stock price exists," Sollenberger wrote in the paper. "And, the surrogates are not particularly effective. The stockholder surrogate is the complaining member-wanting higher dividends and lower loan rates. They would also like to get access to the "excess capital" tied up in the typical credit union's equity section. True, board members are the voice of the member, but evidence indicates that they are not nearly as determined nor as demanding as are shareholders."