The letter below, was sent by a credit union CEO in North Carolina to Rep. Patrick McHenry (R-NC), who has sponsored a bill in Congress, the "Credit Union Charter Choice Act," that would restrict NCUA's power to monitor charter conversions.
Dear Congressman McHenry,
First let me say that I enjoyed meeting with you in Washington this past February while I was in D.C. for the annual Credit Union National Association's Governmental Affairs Conference. Although your time was understandably limited on the day of our visit, I was impressed with your commitment to representing the best interests of the people of the 10th District, including credit union members.
Members Credit Union has 51,000 members. Although headquartered in Winston-Salem, 32,054 or 64% of our members reside in the 10th Congressional District. Many of those members work in furniture and textiles and are of average means.
On behalf of those 32,000 citizens, our members and your constituents, I am writing to oppose your proposed legislation H.R. 3206.
The title itself is somewhat misleading in that "Credit Union Charter Choice Act" is not about choosing a credit union charter at all; conversely it is about eliminating the choice of a credit union charter. When this is the action contemplated, the regulator should be intimately involved. Yet your bill does many things to prevent this very thing.
Proposed Subparagraph F gets to the heart of the matter, "a converting credit union may not be required to include in the notice...any information or statements that (iv) distort the impact of the conversion the members of the credit union..." The fact that the converting credit union would not be required to put ( I would suggest in bold, 20 point type) the fact that the members are relinquishing 100% of the capital of the credit union of which 100% belongs ( and is ultimately payable ) to these same members is a gross distortion of the impact of a conversion. The Board and management of a credit union are charged with the responsibility of protecting the assets of the credit union and have a primary fiduciary responsibility to the membership, and an action like this is tantamount to dereliction of duty. It smacks of corporate raiders.
It concerns me that although this legislation was offered as pro-consumer and characterized as "not anti-credit union" on your website, North Carolina credit unions were not asked for their input prior to its introduction. Furthermore, based on the feedback I am aware of, your measure has received praise only from those outside the credit union industry (bankers) and from those inside our industry desirous of conversions themselves.
Your commitment to improving the quality of life for your constituents is a worthy goal. In my opinion, working towards achieving that goal means having more, not fewer credit unions. A recent study conducted by Dr William Jackson at the University of North Carolina helped quantify how much of an impact credit unions have in the lives of North Carolinians. Dr. Jackson's research found that in 2003 credit union members in North Carolina saved $336 million by using credit unions instead of banks. His work further revealed that non-credit union members in North Carolina (bank customers) saved $60-million because of the presence of credit unions in the marketplace.
In closing I am asking you to reconsider this bill in light of the 88-million consumers nationwide and the 32,000 in your district who have chosen to be members of credit unions across our great nation. These members need to be fully informed especially in decisions of this magnitude and H.B. 3206 does not protect their rights. Our members do not support this bill. Thank you for your time and I look forward to seeing you again.
Sincerely,
Jack V Braswell, Jr, President/CEO
Members Credit Union
Winston-Salem, N.C.
