WARSAW - A delegation of U.S. credit union representatives has returned from Poland, where it visited extensively with that country's credit union movement, helped to lobby Polish lawmakers, and met with several high ranking government officials.
A primary focus during the trip was what the World Council of CUs (WOCCU) called "potentially damaging legislation" before Poland's Parliament, sponsored by pro-banking groups, that seeks to end all lifetime membership provisions, requiring members to leave their credit unions if they no longer work for employers who belong to those credit unions' FOM. The proposal would also limit CUs from certain funding sources (CU Journal, Sept. 22).
WOCCU reported that during three separate events the delegation met with a dozen Polish lawmakers, including Piotr Kownacki, head of the Chancellery of the President of the Republic of Poland, the country's equivalent of the U.S. presidential chief of staff.
"The new regulations will have a devastating impact on Poland's credit unions if passed," said Grzegorz Bierecki, president of Poland's CU trade association and treasurer of WOCCU.
Mike Mercer, president of Georgia Credit Union Affiliates (GCUA), told Polish officials that recent limitations on consumer lending by U.S. banks in the wake of the subprime mortgage crisis have made U.S. credit unions an even more critical resource during the current economic.
The Polish CU movement is expecting expects as much as a year of discussion and no definitive action before mid-2009.
Goal: 500 Branches
* U.S. credit unions aren't alone in seeking to boost their branch networks. In Dynia, Poland, SKOK Stefczyka opened its 288th branch near the Baltic Sea. The CU has a goal of 500 branches by 2012, and officials see other opportunities, as well.
"There are no checks and very few credit and debit cards in Poland," Spawomir Michalewski, deputy director of SKOK Stefczyka, told the WOCCU group. "This is a cash society and requires many hands."
Poland's cash dependency may have resulted from a lack of financial industry development during consecutive decades of Nazi and Communist oppression, WOCCU said, adding the challenge facing Polish credit unions is to create an appetite for credit and an appreciation for electronic transaction capabilities among Poland's 38 million citizens.
SKOK Stefczyka, one of Poland's 67 credit unions, currently serves 600,000 members and maintains assets of $1.1 billion, a figure it has reached in 15 years.
Polish CUs Take Subsidiary Public
The U.S. delegation got a glimpse of a business model that U.S. credit unions have not yet deployed when the National Association of Cooperative Savings and Credit Unions (NACSCU), Poland's credit union trade association, financed ATMs and credit card development programs for its members by creating the Credit Union Financial Society (TF SKOK), which it then took public in June.
TF SKOK's initial public offering listed 5-million shares on the Warsaw Stock Exchange at 1 Polish zloty (about 42 cents) per share. The first offering sold out quickly, raising five-million zloty ($2.1 million) for the NACSCU initiative, WOCCU reported. Despite being available to the general public, all of the initial shares were purchased by CU members.
Funds raised will help support NACSCU's ATM program, which already has 200 units in place, and to strengthen the country's fledgling transaction card program, seen as a key step in moving Poland from its current status as a cash-based society and opening up avenues for other savings and credit products.
Bierecki said that despite additional effort and a compliance cost of 5% of the funds raised, $42,000, going public with TF SKOK wasn't a difficult nor expensive proposition.
"You have to admire their creativity; however, the pressures in the U.S. of being a publicly held company are tremendous, and I'm not sure the tradeoff would be worth the effort or expense," said Bill Cheney, president of the Calfornia/Nevada leagues.
Poll: Safety & Soundness A Big Driver
* Research conducted by the SKOK Stefczyka more than 50% of members say they choose their financial institution based on proximity, and greater than twice that number cite safety and soundness as the key issue. About 18% say an expansive ATM network is important, even though a small percentage of members have debit and credit cards, and just 20% have any type of loan, savings or investment account.(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com/ http://www.sourcemedia.com/
