Conversions, Excursions & Other Stuff You Might Have Missed
In case you couldn't pull yourself away from American Idol last week, here's some of what you missed during CUNA's GAC:
* Not surprisingly, the question of credit-union-to-bank conversions finally started to get some attention during the meeting, which came just a week after NCUA proposed rules to make it more difficult to convert charters. Late afternoon breakouts at GAC are usually as popular as a C-Span documentary on CPAs, but one such session on conversions drew a big crowd (see story, page 16). One person who identified himself as a former banker observed that if there were $50 billion in net worth just among large CUs, at least 25% of that net worth would be considered excess at a bank, meaning there's $10 billion to $12 billion "that can go into somebody's pocket."
Unknown to most people at the meeting was that the person responsible for leading many of those conversions, Alan Theriault, was in attendance at the Washington Hilton. Theriault claimed he was meeting with "several" CUs and suggested it had to do with a conversion.
And speaking of conversions, Washington-based attorney Steve Bisker, who has donated his time to help fight such efforts, said he has contacted some credit unions about donating money to a fund that would be used to assist members whose credit unions are trying to convert and who want to alert other members of what's going on.
Finally, some of the audience questions were indicative of how (frankly) naive some folks remain about the intentions of those leading conversions. One person's question assumed that if a CU converts to a mutual savings bank, everyone is given stock. Another person said a CU conversion would be OK if the board and management remained true to CU principles. But as NCUA's Kirk Cuevas made clear, "I had a CEO in my office six years ago who made that same argument, that they would remain true to principles. And five years later they were a stock institution."
* Overheard Conversation of the Week: Director 1: "Are you headed to the Hill?" Director 2: "Yeah, we're going to the Air & Space Museum. What about you?" Director 1: "Yeah, but we're going to the Natural History Museum."
* Few sessions have ever been as entertaining or at times uncomfortable (frankly, you can disagree with his position, but ABA Chairman Ken Fergeson should get an award for even showing up) as the debate between Fergeson and SECU CEO Jim Blaine. For those scoring at home, it was Blaine game, set, match. But one serious point that deserved attention was dismissed by Blaine. When moderator Dean Anason of American Banker asked why credit unions did so poorly in member satisfaction in that newspaper's most recent survey, Blaine remarked that one year does not a trend make. Why credit unions have sunk to the point their satisfaction numbers are downright "bank-like" is a point that demands honest discussion. Because if it happens again, that's more than a trend-that's a mighty big problem.
* How's the economy doing? That seems to be wholly dependent upon point of view. Just minutes after NCUA board member Debbie Matz presented New Hampshire league president Dan Egan with an award recognizing his work on behalf of a program to help low-income people scrape together the downpayment for a house, Treasury Secretary John Snow strolled to the podium and immediately touted the booming, "robust" economy. A day later Rep. Paul Kanjorski said he is very concerned over the sharp drop in consumer confidence. He was followed by commentator Chris Matthews, who said the Bush administration has timed the economic recovery just right.
* In a world where it appears everyone and their kid has a cellphone, it was hard not to notice the wall of payphones at the Hilton were always full. The only logical conclusion: these individuals are all having affairs.
* Rep. Barney Frank on the differences between most companies and CUs: "I've never had a constituent call me up and say, 'I'm a customer of the telephone company. Be nice to them.'" On why CUs are successful: "The best thing going for credit unions is bank consolidation." On competition: "In America, every single business is apparently at a disadvantage compared to everyone else. It's a constantly down-sloping playing field. It's a unique economic concept."
* Lois Kitsch, who was presented with the Individual Achievement Award at The Herb Wegner Awards dinner hosted by the National Credit Union Foundation, gave one of the most moving acceptance speeches in recent years. She was recognized in the video preceding her award for her work in the Philippines, and now in an extraordinarily challenging environment, Afghanistan. What was striking in some conversations that evening wasn't that many people hadn't heard of Kitsch, who isn't one for blowing her co-op horn, but how many people didn't even know credit union work was going on in those countries.
Frank J. Diekmann is editor of The Credit Union Journal.