By Ray Birch
FOLSOM, Calif.—If given the option to join CUNA or the state league, a number of credit union leaders say their credit union will stay with dual membership—primarily to give CUs more clout in Washington.
Consensus, too, among executives who spoke with CUToday.info, is that CUNA reversing its position from September and now moving toward membership choice— belonging to the state league only, belonging only to CUNA, or having membership in the traditional league/CUNA model—is a critical step in the future of the trade organization. Most feel membership choice in the long run will only unify credit unions behind the trade group.
However, one executive contends that CUNA has opened “Pandora’s Box,” and that trouble lies ahead for the trade association and credit unions—and for leagues that are not financially and operationally strong.
All executives interviewed agreed that choice forces CUNA and the state leagues to perform, as now they could be competing for membership. One large California credit union even plans to request that CUNA sign a performance agreement on which the trade association will be evaluated.
SAFE Standing Pat
SAFE CU here will continue to be a member of both CUNA and the league, said CEO Henry Wirz, adding that his $2.3-billion credit union is planning to evaluate CUNA’s annual performance just as it does other “vendors.”
“We need to have CUNA and our league provide us with regulatory advocacy, political advocacy and public advocacy,” explained Wirz. “We realize that individually credit unions are not as strong as we are when we cooperate through our league and CUNA.”
Henry Wirz, SAFE CU
In Massena, N.Y., the $500-million SeaComm CU is staying with dual membership. CEO Scott Wilson feels that supporting both state and national advocacy efforts delivers the greatest daily impact on Capitol Hill and in legislatures across the country.
“There needs to be resources at both the state and national level and we feel if we choose to allocate our dues only to the national level—and have the greatest impact for us as federally chartered credit union—it will eventually have a negative impact on our state association,” said Wilson. “Now is not the time to be dividing our resources.”
Strongest Structure
Doug Fecher, CEO at Wright-Patt Credit Union in Beavercreek, Ohio, said his $3.2-billion shop will stay with CUNA and the Ohio Credit Union League. “We believe dual affiliation offers the strongest possible trade association structure for the nation's credit unions.”
In Washington, CEO Evan Clark said the Department of Commerce FCU receives value from both CUNA and the MD/DC CU Association, and that his $345-million CU will not change its affiliation.
A primary reason the $413-million floridacentral CU in Tampa, Fla., intends to remain a member of CUNA and the state league is to help credit unions remain unified and represented by one single voice on Capitol Hill. But CEO Laida Garcia is not certain all credit unions see things that way.
Scott Wilson, SeaComm FCU
“I can’t help but think that we have just opened Pandora’s Box,” she said. “By allowing member choice, a certain percentage of credit unions will take this opportunity to choose between membership in one or the other—maybe neither. While choice is generally a good thing, I feel that in this case we will have caused the splintering and weakening of our great credit union industry.”
Still Uncertain
But the $765-million Michigan First CU in Lathrup Village, Mich., is still undecided about its move, as is GFA FCU in Gardner, Mass.
Michigan First CEO Michael Poulos said his credit union is pleased that CUNA will likely be putting forth a proposal that will offer membership choice, which he said promotes competition and leads to better outcomes.
“At this time we are evaluating our options and should make a decision soon,” said Poulos. “We will definitely maintain our relationship with the Michigan league, no matter what.”
“We have yet to make a decision,” said Tina Sbrega, CEO of the $454-million GFA FCU. “Although I am pleased to see that choice will now be available to credit unions, we must also consider that if we do not support CUNA at the national level we may lose some of our political clout.”
CUNA’s Standing
If CUNA did not reverse its position on membership, some feel that would have hurt the trade association’s standing with credit unions, and therefore its future.
“CUNA was suffering from credit unions leaving their membership because of the strict structure and lack of perceived value. This is one of the steps to give some creditability back to CUNA,” said DOCFCU’s Clark, who added that following the departure of former CUNA chief Bill Cheney that Jim Nussle is a good choice to lead the trade group forward.
Wright-Patt’s Fecher sees choice reducing the number of credit unions leaving CUNA and the leagues. Not having membership choice is a key reason State Employees’ CU in Raleigh, N.C., pulled out of CUNA and the state league in 2014. That high-profile move by the $31-billion CU was a primary spark in reigniting discussion among credit unions about CUNA’s dual membership structure.
“We appreciate that not all credit unions see the issue the same way,” said Fecher. “By allowing credit unions to choose whether or not to belong to both CUNA and their state league, CUNA is giving credit unions the opportunity to be part of the system and thus have a voice at their chosen level rather than being outside the CUNA/league system altogether. We believe this will result in a stronger support system for credit unions and their members.”
Evan Clark, DOCFCU
CUNA ‘Open-Minded’
Garcia said it is clear that the CUNA board reversed its position out of their “willingness to remain open-minded” and listen to the “collective message” of all credit unions—“even though it was primarily the larger credit unions with assets of $1 billion and over that voiced their strongest displeasure at CUNA’s original decision. CUNA did the right thing by reversing its position, although it will most likely mean that CUNA must now reinvent itself.”
In January, CUNA announced a reorganization that led to the departure of some long-serving executives and well-known people. Distinctions between internal departments, and between CUNA’s Washington and Madison offices have been replaced by a unified structure and team called 1CUNA.
Garcia and several other CU leaders interviewed by CUToday.info emphasized that both CUNA and the leagues provide value, and that each has a clear and distinct mission, complementing each other. That helped SeaComm make its decision.
“The decision to maintain both memberships wasn’t a difficult one for us,” said Wilson. “We understand the value proposition of belonging to both. I would challenge each credit union to really think long and hard about their decision. It is one that may have long-term implications for our members and the industry as a whole.”
Too Many Voices
Wirz contends that credit unions have weakened their collective influence by having too many trade organizations that often split their voice.
“We have so many trade organizations because a trade organization did not address the problems and the members did not feel they could work within the organization to make changes,” said Wirz. “The CUNA decision on choice makes that less likely to happen in the future.”
Fecher said CUNA allowing choice illustrates that credit unions and their trade associations are evolving.
“Exactly as they should be. My hope is that one day we will see just one national trade association and a host of strong, capable state leagues supporting credit unions and their members,” said Fecher. “We have some work to do to get to that point, but CUNA has made a strong—yet difficult—step in the right direction. I applaud what they're doing.”