By Frank J. Diekmann
If you attend an NRA convention wearing a “Repeal the Second Amendment” t-shirt, odds are pretty favorable that you will be the one getting repealed.
Stand up in church and announce, “There really isn’t a God,” and there’s a good chance you’ll be the newest stain on the stained glass window. But look to hoodwink the members and turn a credit union into a bank, and the entire credit union community will come together and... Um, Er...Well, it won’t do very much of anything.
Over the years I’ve been struck by many things in credit unions, but the one thing that has struck me most over the head like a life-size marble statue of Ed Filene is that the “it’s-all-about-the-members, people-helping-people" people seldom step up or step in when some of those people (management and board) attempt to enrich themselves at the expense of other people (the member-owners).
If the business model is indeed a superior model business, as we are so often told, then why nothing-but-crickets when it comes to standing up for it?
Only Know What They're Told
Case in point is the latest conversion attempt, this one by the $200-million Monterey Credit Union in California. It has been actively pursuing a charter conversion to mutual savings bank for several years and this summer more than 3,000 of its members voted in favor of the change. And why wouldn’t they? The only information MCU’s 19,504 members had gotten ahead of the vote came from the credit union itself, and that ain’t exactly an impeachable, impartial source. No member meeting was held and to the best of my knowledge, no other credit union or the California league made any effort to provide those member-owners with any information on what it is they are members of and what it is they own (for now).
Monterey Credit Union has said it needs to become a bank in order to escape the business lending cap in place for credit unions. According to financials posted by American Share Insurance (MCU is privately insured), as of Sept. 30 Monterey Credit Union had exactly zero dollars in MBLs/commercial loans. Zip.
I’m guessing members weren’t told that. Or that if it were suddenly up against that cap, it could participate-out some of those loans to get relief. I’m guessing members were told they will remain members as a mutual savings bank, but weren’t told that not all members will remain equal members. That one person, one vote thing? History. It will be one dollar, one vote. And when the mutual bank converts to a commercial bank (they almost always do), “equality” will be a quaint and forgotten concept when it comes to cashing in on equity that currently belongs to everyone.
On its website Monterey CU notes, “If you do move out of the area, our remote banking services will allow you to continue to bank with us and continue to receive world class member service!!!” That sounds great, but let’s not forget North Korea is part of the world, too.
A New Year's Resolution For You
Credit unions and their trade association just finished another session of Congress “fighting to protect the tax exemption,” according to all the press releases, tweets, newspaper and TV interviews, and blogs. But there should be no exemption for standing up to fight for what you claim to believe in. Yes, a credit union is a democracy, but voters in democracies have a right to make an informed vote. And those who know better have an obligation to inform them.
Although there’s been a delay in the conversion as the California Department of Business Oversight mulls how to handle such a move, the credit union talk once again rings hollow. It’s not talk the talk and walk the walk—unless someone balks. You talk it and walk it all the time. And if credit unions aren’t going to do the talking and walking, who, exactly, is going to?
Have exercising more among your 2015 resolutions? Then resolve to walk the talk.
Frank J. Diekmann is Cooperator in Chief at CUToday.info, and can be reached at Frank@CUToday.info.