Coalition For CU Charter Options Was Mischaracterized

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I am a longtime reader of The Credit Union Journal and especially look forward to reading the editorial opinions written by Credit Union Journal Publisher Frank Diekmann and the many guest editorial writers in each weekly edition.

In a recent editorial Mr. Diekmann presented some of his opinions as if they were fact. I'd like to suggest he clarify and correct those remarks. First, he inaccurately characterizes the Coalition for Credit Union Charter Options as a "small group of former CUs that have converted to banks." That is an oversimplification that does a disservice to Credit Union Journal readers. The coalition's advisory board is composed of former CU executives with hands-on experience with mutual savings bank charter conversions. Our executive director is a former CU and mutual savings bank executive. I have spent 30 years working with credit unions, including 20 years as a credit union lobbyist. Our general membership is 80% composed of credit unions, some as small as $50 million in assets with no plans to ever convert. We have no bank trade associations as members.

Secondly, Mr. Diekmann errors greatly when he characterizes me personally, as "a former credit unionist who has gone to the other side." Mr. Diekmann's anti-conversion editorial slant is well known to regular Credit Union Journal readers and I worry that he has succumbed to the credit union trade association rhetoric that tries to paint conversions as a good vs. evil battle. It would be just as unfair of me to characterize him as a shill for CUNA, NAFCU and NCUA simply because of his point of view.

There is nothing "former" about my admiration of credit unions. It would be more accurate to characterize me as a "credit union pragmatist" or as a consultant who recognizes that while a credit union charter can serve many institution's strategic and competitive needs, it is not the only legitimate financial institution charter choice.

In an uncertain world, I consider it shortsighted to slam shut any strategic options. Mr. Diekmann can also accurately characterize me as being like that little boy in Hans Christian Andersen's, "The Emperor's New Clothes," who is bold enough to tell everyone the truth despite a few people within the credit union industry's apparent preference for the past and reluctance to deal with today's realities.

Credit unions and mutual savings banks are much more alike than they are different. I believe that every credit union of $50 million or larger, especially one with a multi-group or community FOM, has a stewardship responsibility to at least study the effect of converting to a mutual savings bank charter. If a credit union's leaders understand what conversion to the MSB charter entails and choose to retain a credit union charter then they have done their duty. The credit union charter is probably the best charter for 95% of credit unions. It's the rights of the other 5% that the coalition is committed to protect.

Marvin C. Umholtz, President & CEO

Umholtz Strategic Planning & Consulting Services

Castle Rock, Colo.

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