By Frank J. Diekmann
CUNA mentions “transparency” as it relates to NCUA just slightly less frequently than members make withdrawals at their CUs’ ATMs. But when it comes to its own board it can sometimes be about as transparent as the College of Cardinals when it comes to selecting a pope.
So we have to do a little deduction to guess what might have transpired inside the CU-stine chapel when the CUNA board voted last week to reject two of the three recommendations made to it by the CUNA System Structure and Governance Report—because reading that report—which CUNA deserves credit for releasing and which is packed with numerous interesting findings—reveals a task force that put some force into its task.
“The Task Force recognizes that the CUNA/League System has a proud history,” the task force said in its executive summary. “Over the past eight decades, leagues and CUNA have been intimately involved in the creation of most credit unions, and in the major advocacy victories of the credit union movement. Six out of every seven credit unions voluntarily affiliate with their league and CUNA. Despite this strong and deep record, the Task Force believes the system’s structure must be enhanced and must evolve to meet future credit union needs.”
And there, as former Danish league president Prince Hamlet used to say, “is the rub.”
My guess: the “proud history” ran smack into the “bottom line present” on the most potentially impactful of task force’s recommendations: that credit unions be given the option of belonging to their league AND CUNA or their league OR CUNA.
The state league business model has changed in those eight decades: today, those who least need their leagues pay most of the dues; those who most need their leagues pay the least. It wouldn’t take too many large CUs opting to exit their leagues to have those leagues looking to the exits. We’d all like to think larger CUs would continue to support their much smaller brethren in the name of cooperation, but…
Concerned About Small CUs For a Different Reason
One interesting finding in the report, by the way, was that when it comes to credit unions in the $100 million to $1 billion asset size group, “They are concerned about the future of small credit unions, and what further consolidation might mean for the image and advocacy efforts of the credit union industry.”
We’ve already got eight regional leagues such as Cornerstone, Cooperative, League of Southeastern CUs, Northwest CU Association, etc., and some leagues are already collaborating on backoffice functions. Give CUs the option of opting out of a league, and single-state leagues might not be seen again unless you’re touring America’s CU Museum. I’m guessing that forecast was made more than once during the meeting of the CUNA board, which has three league presidents as members.
Another interesting finding revealed in the task force’s report: “Assuming the current joint membership requirement persists, a majority of credit unions would like to have the option of which league to join, and larger credit unions are more likely to feel this way.”
Regardless of which league a CU belongs to, “the main services desired from the System are operational support; practical resources that are easy to implement, and that will help them survive,” the report said of what CUs of up to $100 million in assets want from their league, along with networking opportunities, hands-on operational support, local training, state political influencing, webinars, compliance, and endorsed vendors.
All of that costs money and doesn’t make for a lean association machine, which is important, since the largest CUs (those of more than $1 billion), told the task force what they want is a “powerful, lean and aggressive national trade association, closely aligned with streamlined, efficient state or regional associations.”
Passion Can Be Felt
You don’t usually associate the word “passion” with the words “task force report,” but you’ll find it both on the page and in-between the lines of the otherwise dry sounding System Structure and Governance Report. I can only imagine how passionate and perhaps even heated some of the task force's discussions were. The 13 members of the task force have to be disappointed their recommendations now have something in common with the presidential campaign of one Michael Dukakis—but I also can’t imagine they were completely surprised.
“The Task Force is releasing this information confident that credit unions, leagues and CUNA will use it to fortify an advocacy system that produces major results to remove barriers to credit unions so that they can serve as primary financial institutions to even more Americans,” concludes the executive summary.
PFI status likely wasn’t the hot topic in whatever debate took place during the CUNA board meeting; don’t-want-to-die status likely got more of an airing.
Ultimately, the task force took the long-term view, offering recommendations for where the CUNA/League system should be in the year 2025, even as it acknowledged that “separating membership requirements of leagues and CUNA could be disruptive.” That’s the kind of vision task forces are supposed to provide.
Like most elected bodies, the CUNA board—which also rejected a disruptive plan to shrink its size—is more concerned with the shorter term. It’s not that 2025 lost, it’s just that 2015 won.
Frank J. Diekmann can be reached at Frank@CUToday.info or @FrankCUToday.