By David Adams
In this month’s edition of Priority Report, I would like to address two issues. One that is national in scope and the second one pertaining just to Michigan’s Credit Unions and our MCUL board action regarding the authorization of compensation for Credit Union board directors.
First, the CUNA/league structure issue.
Some time ago, the prior CUNA chairman, Dennis Pierce, appointed a CUNA System Structure Task Force to review CUNA’s structure and governance. Our own Patty Campbell, CEO of Christian Financial CU serves on this task force. The preliminary findings of the task force were recently presented to the CEOs of the largest Credit Unions in the country at the National Credit Union Roundtable meeting in Denver last week, as well as to league presidents at the same meeting.
Unfortunately, the task force findings made their way to the CU Times in a way that was less than flattering regarding the CUNA/league structure and its effectiveness. There were reports of survey data showing that many Credit Union leaders are unhappy with the advocacy results of CUNA and leagues. Also, some very preliminary ideas were leaked to the media that haven’t even been vetted or considered by the CUNA board. This was unfortunate and I hope that CUNA will find ways to avoid these kinds of miscommunications in the future.
In CUNA CEO Jim Nussle’s May 8 Nussle Report, he provided an excellent summary of where the process is truly at and what CUNA and leagues are working on to improve our advocacy results. Further, he makes clear that no specific ideas regarding structure and dues changes have been acted on by the CUNA board or by league boards yet. While many ideas will be considered, none are in the queue yet.
This is important to MCUL and to me as CEO of the league because, while I certainly agree we need more legislative and regulatory victories in Washington, I do not believe these results will come as a result of structure and dues changes.
What is required is a more aggressive national agenda and a game plan for achieving success. This will obviously require the commitment of all affiliated Credit Unions in the multi-faceted grassroots lobbying process that includes, PAC fundraising, support for advocacy funds like “A Stronger Financial Michigan” and the many meetings that we engage in for campaign involvement and issue-based lobbying with our lawmakers.
In Michigan, we have a very strong grassroots advocacy machine where our Credit Union community actively supports all of these facets. But what is needed from CUNA is a stronger, more aggressive, more urgent agenda. I believe this should include long-overdue updates to the Federal Credit Union Act, specific exemptions from CFPB rulemaking, effective data breach legislation, expansion of member business lending authority and economic reforms that help Credit Unions lend more effectively and promote savings and retirement planning as well.
As CUNA and its board work to establish this agenda, the CUNA/league lobbying machine will cause results to happen, with help from the Credit Union community.
Speaking for MCUL, we don’t need help from CUNA with our very low dues structure, nor with how dues are collected or distributed. We also believe that dues dollars are important for more than just advocacy, although that is our highest priority. In Michigan, we support cooperative advertising, education, information offerings and support for small-asset-size Credit Unions, in addition to strong advocacy efforts. We also don’t want anybody disparaging the importance of fee-based services. We’re proud of the CU Solutions Group model and how we fund our Michigan operation with less than one percent of our total operating budget being supported by member dues.
We will look forward to all kinds of creative dialogue at the national level and we will participate in that dialogue. But in Michigan, we’re strong advocates of local and state determination so that we serve the unique needs of our Michigan Credit Union community effectively and at the lowest possible dues cost.
Now, on to my second issue.
At last month’s April MCUL board meeting, after extensive dialogue with Credit Unions across our Lower and Upper Peninsulas, the board voted to not seek authorization for state-chartered Credit Unions to compensate directors. At least, not at this time. There were very strong feelings that this could potentially jeopardize the MCUL’s efforts to modernize the Michigan Credit Union Act. More than 50 very important enhancements are being sought this year.
In addition to that concern, the MCUL board felt that volunteerism continues to be an important hallmark of the Credit Union model. Many Credit Union leaders shared their views with MCUL directors regarding their desire to retain this unique feature in the Michigan Credit Union Act. That said, I know for a fact that our board will revisit this again in the years ahead. MCUL and its board are committed to making sure that the state charter remains the charter of choice for Michigan Credit Unions.
Since our last act update in 2004, there has been a steady stream of conversions from the federal to the state charter. Increased flexibility for field of membership authority, greater CUSO investment options and a more responsive state regulatory environment are all reasons why this has happened.
I believe that all federally chartered Credit Unions in Michigan should consider the state charter as the best option in Michigan. Our league staff, headed by former Commissioner Ken Ross, will be happy to assist with an analysis of the benefits of the state charter. MCUL is simply in a much better position to enhance your charter and the supervision and regulatory climate for state charters than we can for federal charters.
This is evidenced by the governor’s recent appointment of former MSUFCU President/CEO Pat McPharlin as the director of the Department of Financial and Insurance Services.