There would appear to be disproportionate anguish in some creditunion circles about the recent announcement that Technology Credit Union is considering changing its charter tothat of a mutual savings bank. 

On its website the credit union has responsibly communicated toits owner-members why the structural change is being considered aswell as the potential pros and cons. The general membership hasbeen invited to the discussion table early-on, and the highlysupervised process leading up to a membership vote on the requiredtransparent conversion plan has just begun. Technology Credit Uniondeserves to have the industry's support during this importantdecision-making process.

I know of other credit unions that have actively looked at aconversion as part of their contingency planning. I think that theboard of directors and management of every credit union have theobligation to consider all strategic and organizational options. Iam disappointed to see any credit union seek a different charterand regret that currently the credit union charter is notsufficiently versatile to meet everyone's needs. However, I respectTechnology Credit Union officials' right to present this businessmodel option to their membership, and I strongly support eachmember's right to choose whether to support it or not. Regardlessof the balloting outcome, members-customers are best served whentheir neighborhood financial institution survives and thrives, beit a bank or a credit union.

Unfortunately, I am also disappointed to read the CUNAleadership's recent comments, as well as the initial communicationabout Technology Credit Union received here in California from theCalifornia and Nevada Credit Union Leagues, which made it soundlike they are knee-jerk opposed to the conversion at the outset.They appear much too quick to mouth with unconvincing philosophicalplatitudes, alarmist member-experience scenarios andunsubstantiated marketplace claims. There are lots of good reasonsto be a credit union, but it is not the only legitimate financialinstitution charter in existence. Credit unions and mutual savingsbanks have more in common than some would have you believe, andboth charters can be extremely customer friendly andsuccessful.

For example, here in California in 1999, there were six creditunions serving the Kaiser Co. Today only two of them remain ascredit unions and one as a bank. It was in 1999 that KaiserPermanente Federal Credit Union converted to Kaiser Federal Bank,and it is today the only really successful financial institutionfrom the former group of six. It has a full menu of servicesand  a great reputation for serving customers. Its assetsgrew from $174 million to over $900 million (up 417%). KaiserFederal Bank's one-year certificate of deposit interest rate ishigher than the two remaining credit unions' rate, and its courtesypay overdraft fee is $5 less. Of course, I could share many creditunion success stories as well, but the point is the credit unioncharter is not inherently blessed, and the bank charter is notnecessarily the road to perdition.

Too often in recent charter conversion efforts, state andnational trade associations have misapplied their sense of pride incredit unions' accomplishments by aggressively interfering inindividual institution's conversion efforts. When they have notengaged in these unwarranted interventions themselves, they havebrought in their surrogate mercenaries like the NationalCooperative Business Association or the Center for Member Trust.Some of these anticonversion groups appear much too willing tosubstitute their narrow judgment about what is good for the memberof a particular credit union rather than respecting that thosemembers and the credit union's officials are much better positionedto make that decision themselves.

As a dues paying member of CUNA and the California Credit UnionLeague, I will be greatly disappointed if either organization doesanything overt to oppose this conversion effort or to so-called“educate” the Technology Credit Union membership to vote againstthe conversion plan.

Messing with any credit union's internal governance affairs isan ugly business and is not proper behavior for a trade associationor other misguided outside groups. The Technology Credit Union'sofficials and membership should be allowed to take care of theirown business without having to fend off external hysteria anddisparaging misinformation. Let's have some respect for thedemocratic process that  we so often rely on to explainthe benefits of the credit union charter.

CharlesBruen
President/CEO
First EntertainmentCU
Hollywood, Calif.