CUNA and state leagues
I stay somewhat befuddled and perplexed about this business of requiring credit unions to be members of the Credit Union National Association (CUNA) as a prerequisite to joining a state league. Credit unions pay dues to both of these organizations. CUNA is not the U.S. federal government which requires all states to fall under its jurisdiction; although, like the federal government, CUNA has become somewhat bloated and duplicative. This requirement seems to violate the very tenets of freedom of choice. When I served on the board of a credit union, this issue resurfaced every year, and we usually capitulated and maintained our memberships in CUNA and our state league, but not all of us board members agreed on this approach. Since our organization was rather large, so were our dues, and some of us had difficulty in justifying the expenditure of our members’ money to CUNA. This prompted some of us to question the value we received for the services provided. In fact, there were occasions in which we questioned our need to even be a member of the state league.
Most state league CEO’s are rather reluctant to challenge this dual requirement, and the reason, I surmise, is more political than anything else. Dave Adams, CEO/President of the Michigan League, believes that they (the league) should have control over its membership requirements, not an external entity which possesses common goals. After all, aren’t there already enough rules, regulations, directives, bulletins, procedures, and policies in existence governing credit unions without adding more? What’s wrong with mutual exclusivity? There is too much overlap in what the state leagues and CUNA do for the approximately 7,000 credit unions in the United States.
Where is the justification for any state league to insist that a credit union must hold membership in CUNA? This is not intended to be a criticism of state leagues or CUNA, but historical practice is not a sufficient explanation. Just because CUNA is the largest trade association in America isn’t enough. Neither can it be justified on the basis of past practice. Something done in the past doesn’t mean that it should be continued into the future. Times, the economy, and conditions change. If the members’ money is to be expended, there should be sound financial and fiduciary grounds for that decision. Logically, this requirement could be extrapolated to include other trade associations such as the Credit Union Executives Society (CUES)–among others.
I’ve always wondered about the action of the largest credit union in the world, Navy FCU, back in December of 2007 when it “disaffiliated” from CUNA. Today that organization has 5.7 million members and now exceeds $70 billion in assets. According to the Credit Union Times, dated December 6, 2007, the rationale provided then was because of the use of a lobbyist in common by CUNA and payday lenders. Simultaneously, as an aside, CUNA also “disaffiliated” with the Virginia Credit Union League at that time. From past experience, it seems to me that credit unions which have asset sizes in billions of dollars and large memberships do not, necessarily, need the services of CUNA. For that matter, for such credit unions, probably not even a state league membership is necessary.
The question is why should this practice continue? The answer usually given is because CUNA and state leagues are important to smaller credit unions, and that is probably not arguable, but why should memberships of large complex credit unions be responsible for small or fledgling credit unions? This is where credit union philosophy comes into play. The very nature of credit unions as nonprofit cooperatives lends credence to the credo of “people helping people.” With that in mind, it is my belief that all leaderships of credit unions should act in the best interest of individual credit unions. It does not comport well that a state league “requires” a credit union to be a member of CUNA. I say bravo to CEO/President, Dave Adams, and the Michigan Credit Union League. Recently, the Carolinas Credit Union League board of directors unanimously decided to allow its 149 credit unions to join the league without requiring them to join CUNA. In conclusion, it is logical and reasonable for all state leagues and others such as the Carolinas to stop requiring credit unions to have to be a member of CUNA before becoming a member of any other organization.
