An Opportunity for the Combined Trade Group: America’s Credit Unions.

The merger of CUNA and NAFCU proceeds apace.   The 60-day voting period by members began yesterday. Already scheduled NAFCU educational and network meetings continue. CUNA President Nussle will attend NAFCU’s Congressional Caucus in September to show a united Washington effort.

Joint transition committees have been appointed.  One initial product was a proposed dues structure. As I read the announcement, members of both organizations are expected to continue  paying the same dues  to the new organization until 2027 (three more years) following the same fee structure in place at December 2023.  It seems illogical  to pay dues for a nonexistant organization three years past its demise.

If credit unions are members of both trade groups, “Dual members are encouraged to pay membership dues for both organizations” even though NAFCU nor longer exists.  Apparently, economic efficiency is not a current goal of the merger.

An Immediate Opportunity for a Unified Effort

The merger process has been focused on the political steps necessary for member approval and  less the potential offered from a “unified voice” in DC.  Even though the political agenda may emerge down the road, there is one immediate opportunity that could demonstrate the possibilities of a combined lobbying capability.

An NCUA board position is now open as Rodney Hood’s term expired this month.  This new member’s six-year tenure should outlast the two current members.  It could extend over two presidential election-administration cycles.

For many recent appointments the expectations, even needs, of the credit union community have not been seen as a factor in the Administration’s choices.   The result is that new board members are strangers to both the Agency and the credit union system.  Think Metsger, McWatters and Hauptman.  Having prior NCUA experience as a staff or board member (Harper and Hood) may be useful, but it still does not bring an industry or coop perspective.

One longtime, now retired, CUSO CEO Randy Karnes (CU*Answers) commented during an earlier appointment cycle: “Cooperative principles make us different. When the NCUA believes that and Washington believes that, we have a stronger system.  But when nobody believes that, then it’s simply about banking regulations. I think our system’s position is weaker, and NCUA is not even thinking about their own brand.”

“Congress didn’t create the credit union charter because the nation needed “nice banks.”

In that same appointment cycle, there was a public White House petition, CO-OPS 4 Change, asking that the administration,  “choose NCUA leaders who understand cooperatives.”  And, “who recognize the shared economic value for people and communities created by the Cooperative model from the seven cooperative principles.”

Jobs for the “Boys” or for Cooperative Leadership

All NCUA appointments result from political ambitions and relationships.   That need not be inconsistent with cooperative leadership.  Earlier NCUA appointments included candidates with credit union experience such as retired and active CEO’s, state coop regulators, CUSO executives and even some with trade association connections.

Knowledge of the evolution of the credit union system and its current status can make regulatory decisions more informed and relevant. The unique structure of the NCUSIF, the potential for a fully engaged CLF, the self-interested trends in mergers, the paucity of new charters, and the continuing use of members’ savings to pay off bank shareholders are critical industry topics.

Even with experienced senior advisors, appointees without credit union knowledge easily default to Agency staff perspectives.

As the combined America’s Credit Union marches forward under a single banner, this appointment is an immediate test of its potential role.  Will the promise of enhanced influence bring forth potential nominees who have cooperative experience? Or will the person be another unknown to credit unions? Can the industry hope members’ needs will  be paramount in a proposed board member’s regulatory views?

The appointment, whenever announced, could provide vital insight about potential benefits of a united credit union voice in DC.

9 Replies to “An Opportunity for the Combined Trade Group: America’s Credit Unions.”

  1. I’m for this merger BUT everything I’ve read so far seems to be focused on the unified voice in Washington, not the future of the credit union movement.

    How will America’s Credit Unions help America start and save more credit unions? It seems the only time we talk about the 3,000 that are under $100M in assets is when we want to show the credit union difference so we can save the 417 that are over $1B in assets from taxation.

    1. I have yet to see anyone explain how a “unified voice” is going to be an improvement over the current structure. I voted against the merger. Not that my vote matters.

      Your 2nd paragraph is spot on. I like to refer to many of those 417 as “credit unions in name only”.

    2. Your comment is spot on although I can’t say I’m on board with the merger. In fact, I’m not sure it matters to a small credit union like mine. I haven’t felt much support from these organizations for years and I don’t expect that to change as a result of the merger. The bigger they get, the farther away we appear in their rear-view mirrors.

  2. Since its creation in 1933, the FDIC has had 28 individuals who have served as chairman or acting chairman of the federal banking agency and insurance fund. Of those 28, all but 3 of them, or almost 90 % of them had a professional resume that included banking, bank regulation or banking law. As you can imagine many of those FDIC Chairman had been owners of local community and state banks. Plenty of proof that the banking community and its trade associations make sure that its interests are best served by assuring that its candidates are at the top of the list of appointees being shared with Senators, Congressmen and presidential staff. More importantly they make sure that their choices are selected.

    Compare that history of effective lobbying and influence to the impact of our credit union trade groups. The last NCUA chairman or board member to have ever sat behind a desk at a credit union was Dennis Dollar.

    What does that say about CUNA and NAFCU? Either they failed to recognize the importance having an agency board member who shared and understood the unique role of credit unions in the financial landscape, or they just were ineffective and incapable of influencing the political decision. Not a good picture, or a history to be proud of.

    Lets hope this new merged association recognizes the strategic importance of playing a vital role in future NCUA appointments. Let’s make sure that this new “CUNA” has both the expertise, influence and capacity to effectively influence those appointments as well or better than the bankers do.

  3. Randy Karnes on the proposed merger:

    The dues plan of this merger shows no investment by two weak players. It protects themselves over their markets. Trade organizations do not build Credit Unions. They play at building trade organizations.

    In the end the merger means:

    * less competition for innovation and creative leadership;
    * a single voice to champion ideas muted and ineffective;
    * a worthless lobby group without operational focus or in alignment for serving members.

    This merger is a sign of our industry’s declining vitality and vigor. All for one, and one for all, is a movie slogan not a call for a stronger, diverse, and creative cooperative community.

    Why am I not seeing more comments on how CUs should react to less real value from our trade organizations?

    Where are the cooperative entrepreneurs who will build based on this vacuum?

    In the end this merger means alternatives will be needed!

    1. Bravo Randy Karnes! I’m so happy to hear a truthful opinion from someone who evidently doesn’t buy into the “accepted” narrative. My credit union (small) stopped paying dues to most of the trade organizations when it became evident they were more focused on pimping credit unions to preferred vendors than they were on actually promoting and serving credit unions. With fewer credit unions in existence, we should be receiving more individualized attention. Unfortunately that could not be farther from the truth. They are out of touch with the needs of the credit unions that need them the most.

  4. Not to sound obtuse, as the issues are far more nuanced, but bigger is not always better, and I’m afraid accountability will be the first casualty, followed by diversity of thought. CUNA’s experiment at marketing came at the expense of smaller credit unions. How will this merger protect, promote and help small credit unions thrive? It’s that community focused, locally accountable business model that’s ensures a credit union’s differentiation. Many of our larger brethren are credit unions and cooperatives in name only.

    1. Ken Olson, you don’t sound obtuse at all. Your message is clear and accurate. Perhaps the small credit unions need to become our own best friends. I’ve used this analogy many times: the big vendors, trade organizations and advocates are like the colorful fish swimming at the top of a giant fish tank. Everyone gushes about how beautiful they are and how clear and clean the water is. Unfortunately, they are only looking from the top of the tank. Those of us at the bottom are the sucker fish swimming in murky water. Without us, their water will eventually be contaminated and dirty as well. Hopefully they will realize sooner rather than later that they need the sucker fish or they won’t survive either.

  5. Credit union dues to NAFCU are less than CUNA dues. Why would a NAFCU member volunteer to increase their trade association dues expense 100%? You can’t join CUNA without joining your state trade association. It is a shakedown-no more choice. And the CUNA directors are all expanding their roles. Is that in keeping with the concept of “People Helping People”?

    Publish the CUNA directors’ salary, comps and benefits-if any. Publish the CUNA CEO comp package too. We got the best trade association MONEY CAN BUY!

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