RALEIGH, N.C. — Jim Blaine believes having a choice between joining either the Credit Union National Association or a state league is critical to the future of the nation's second largest credit union as well as many others in the community.
Dissatisfaction with CUNA's dual membership requirement is the main reason why the $27 billion-asset State Employees' Credit Union has disaffiliated from CUNA and the Carolinas CU League.
In an exclusive interview with Credit Union Journal Monday, the SECU president and CEO explained the importance of having choice during an era in which credit unions, and the leagues, are rapidly consolidating.
"The current league/CUNA structure is unsustainable in the future," said Blaine. "This leads to some questions about the future structure of CUNA."
Blaine talked about concerns over the system not generating enough revenue to support the current CUNA and league structure, and small CUs not being able to afford their dues.
Blaine's Biggest Concern
But he is most worried about the ability of both the leagues and the trade association to meet the changing demands of their individual members.
"It gets to, who, in the real world, is paying for what and what value are the members getting," said Blaine. "Many smaller credit unions feel they are not represented well or get the support they need, and the larger credit unions feel they are not getting enough value. These are very real issues and if they are not addressed we will run into a brick wall and have to address them in a catastrophic context."
Blaine also stressed that league consolidation is diluting the effectiveness of the state organizations to serve their members.
SECU has held these concerns for years, according to Blaine, and has looked to extend its affiliation with other national organizations, outside of the state league, to meet its needs.
"We have joined the Consumer Federation of America, we work with the Pew Research Center, the CFPB, we send many of our staff to many Federal Reserve policy meetings," he said. "We are trying to broaden our look. We are not just credit union centric. We are a credit union organization but are really trying to be an economic force in North Carolina.
Last year SECU hoped that CUNA would reconsider its dual membership policy when CUNA District Director Maurice Smith, also CEO of the $1.3 billion Local Government FCU CU here, in the fall proposed that CCUL and CUNA test the impact of eliminating the dual membership requirement.
One-Year Pilot Proposed
With SECU supporting the effort, Smith proposed a one-year pilot program that would give CCUL members the choice between joining either CUNA or the league, testing the impact the change would have, and then based on results, possibly allowing CUs across the nation to have the same choice.
The pilot would observe the impact affiliation choice has on CUNA and CCUL affiliation rates, dues revenue, legislative, regulatory and political affairs efforts and political action committee contributions.
The pilot would run all of 2014, and would be supervised by an advisory board appointed by the CUNA chair. The pilot would provide forbearance against CUNA enforcing its right to expel a state league for departing from the CUNA bylaws provisions for membership duality.
But CUNA and CCUL, late in 2013, said the experiment in choice "was not feasible" at the time, according to Blaine.
That led to SECU holding a joint forum last month with CCUL CEO John Radebaugh, Smith, and the CU's entire statewide senior staff to discuss continued participation in the league.
"In late January, the issue was brought before the SECU board and since the league renewal deadline was Jan. 31, 2014, the decision was made to not renew as of Jan. 31," Blaine said.
Following the meeting, on Jan. 31, SECU sent a letter to CCUL's Radebaugh stating the credit union would not renew its dues. On Feb 4, Radebaugh responded, saying the league was disappointed but "respected" SECU's decision.
In a Feb. 7 joint letter, CUNA President Bill Cheney and Chairman Pat Wesenberg expressed their disappointment to Blaine while thanking SECU for its years of contributions. The letter also stated that incoming Chairman Dennis Pierce plans to appoint a "Renewal Review Committee" to look at, among a number of things, concerns that some credit unions have with the dual membership requirement.
This committee would begin work following CUNA's Governmental Affairs Conference in Washington later this month, Blaine has also been invited to meet with CUNA's executive committee Feb. 21 to discuss his concerns.
SECU has "been involved in almost every aspect of the credit union movement," Cheney told
