by Henry Meier
Yesterday, the NCUA announced that it was closing down two credit unions, includingOlean Tile Employees Federal Credit Unionin Olean, NY andG.I.C. Federal Credit Unionin Euclid, Ohio. Both credit unions started in1936 with the help of a healthy manufacturing employer to act as their sponsor. With the demise of the sponsor, the credit unions died as well. We hear these stories with such frequency that I think as an industry we have becomenumbed tothem but, in fact, they reflect the single biggest trend taking place in the industrythat we can do something about.
It’s time to get both state and federallegislators to update our enabling statutes and give all credit unions the flexibility they need to cater to an increasingly flexible economy. The growth of credit unions reflects the growth of the American working class and unfortunately as the jobs that created that working class disappear, our industry has to change as well.If we were creating an industry today we would not willingly tie our fate to enabling statutes that tie our growth to select employee groups or associations. We would push for an expansive view of community as technology expands the size of a given area that any financial institution can serve. Remember, not only are manufacturing jobs going away, but your average employee is now going to have several jobs in his or her career. It’s getting harder and harder to classify employees as a distinct group of individuals.
CUNAhas already worked with state-level lobbyist to update its Model Credit Union Act and it provides a ready piece of legislation to at least begin the discussion. In fact, some associations have already successfully advocated for greater by-law flexibility so that theirmemberscan craft a membership base that reflects the unique conditions where they live and work. For instance, it may make sense for a SEG-basedcredit union to becomea community-based credit union that continues a commitment to a specific type of employee group that may be outside of the community.Credit unions would still have to demonstrate that there is a need for their services. They simply wouldn’t have to provide those services within an antiquated regulatory straight jacket.
