Weren't able to make it to Hawaii last week for CUNA's Future Forum? On this page is a round-up of events, comments and developments during the meeting, which was formerly known as the Symposeum.
Lack Of Membership Growth Called A Concern
Membership growth-or the lack thereof- has a number of credit union leaders concerned, not the least of whom is NCUA Board Member Debbie Matz, who told CUNA's Future Forum attendees that the lull in membership growth is a disturbing trend that must be addressed. "Asset growth is far outpacing membership growth, which has been relatively flat at about 2%," Matz observed. "That means your existing members are responsible for most of your asset growth. But as industries continue to downsize and as your aging members die, you cannot just rely on your existing members."
Matz isn't the only one expressing this concern. CUNA CEO Dan Mica told The Credit Union Journal that membership growth is one of the top issues credit union representatives talk to him about when voicing their concerns.
Mica: Congress' Support Is Conditional
hen credit unions aren't worrying about bank attacks against the CU tax exemption, their greatest concerns include membership growth and bankruptcy. "I also hear some individual gripes with their auditors and examiners," CUNA CEO Dan Mica told The Credit Union Journal at CUNA's Future Forum here. But with bankers making credit unions their top issue, CUs cannot afford not to put the bank attacks a top priority, as well, he counseled.
"This battle is real. It's not a way to gin up membership because we already have members," Mica offered, noting that CUNA's affiliation rate has consistently hovered around 90%. "We've seen some of [the bank associations'] materials that they are passing out to their members, and this is by far the most well orchestrated, well organized attack they have ever put together."
While Mica proudly told Future Forum attendees that 159 members of Congress have committed in writing to supporting the CU tax exemption, there is a caveat. "What I didn't mention is the number of [those supporters] who added the line 'as long as you stay true to your mission' to their statement of support," he related. It's an important caveat to note, since the way credit unions define their mission could be different from how these lawmakers perceive that mission.
Directors (And Real Estate Brokers) Offer Views
Even with interest rates expected to continue to tick higher, mortgage lending is increasingly a bread-and-butter business for credit unions, according to credit union executives at CUNA's Future Forum. Not even the astronomical housing prices on the West Coast seem to be slowing that trend, some suggested (see related story, page 1).
"If you were to judge the economy by the housing market, you'd never think we were in a bad economy," said one Alhambra CU board member who is also a real estate broker doing business in California as well as Arizona. "Honestly, I sometimes think maybe the people out West just don't even realize we had a recession. Things are really humping along."
Perhaps the biggest obstacle are the various laws and regulations that drive housing prices even higher, he suggested, which drew nods of agreement from other West Coast credit union directors who also happened to be in the real estate business when they aren't volunteering at their credit unions. "The price of compliance is what we are all paying for," noted one Water & Power Community CU director.
Bank of Hawaii Held Up As Example For Others
In keeping with the Aloha Spirit of the host city for CUNA's Future Forum, CUNA CEO Dan Mica promised not to bash the banks and instead pointed to the harmonious relationship between banks and credit unions here. Mica pointed out a local newspaper ad taken out by Bank of Hawaii that wished "a heartfelt mahalo to our credit union partners," as an example of how the two financial services providers ought to peacefully coexist.
"Banks everywhere could take a lesson from Bank of Hawaii," Mica exhorted, but he noted that in states like Utah, for example, it's hard to imagine such a thing as banks and credit unions getting along and working together. "This is truly paradise here in Hawaii, where they have created an environment where we can all work together."
CUNA recently sent a letter to 100 banks, urging them to drop the "bank/credit union feud" and suggesting how much the two industries could achieve if they weren't so busy fighting each other, and a few wrote back to say they don't consider CUs their enemy, he related. "But I will promise you this-we'll fight 'em or we'll love 'em, but we'll never give up and we'll always win," Mica averred.
Bush Vs. Kerry Was Often The Topic In Hallways
Everything from mortgages and member business services to the soon-to-be implemented Check 21 law were headliner topics at CUNA's Future Forum, here, but with the presidential election just days away as the Forum was being held, political debates cropped up everywhere from the "CU Marketplace" exhibit hall to after hours receptions. While one Denali Alaskan FCU director stumped for John Kerry as the right person to "get us out of the mess Bush got us into," a board member from Kauaii Community CU was rooting for George Bush, and noted that Hawaii, usually a Democratic stronghold, has its first Republican governor and could tilt towards Bush year. A small group of Florida credit union representatives suggested their biggest hope was that whichever candidate wins the notorious battleground state wins "by a landslide" so there will be no question about how Florida voted this time around. "We're all just hoping it's some other state on the hot seat this time," one offered.
Seeking Diversity, Hawaiian CU Adds Caucasian
Credit unions that are seeking to diversify their boards could learn a thing or two from Hawaii, which has no majority ethnic group.
"We are all minorities here," said Hawaii CU League CEO Dennis Tanimoto, as he welcomed some 1,900 attendees to CUNA's Future Forum, here. In fact, one board member from Kauaii Community CU noted one of the driving forces behind his being nominated to the board was his race: Caucasian. "They were looking for more diversity on the board," he said.
CU Gives To Family Services
Does size matter? When CUNA CEO Dan Mica sent a letter to the nation's top 100 bankers urging them to put an end to this battle, he heard back from only a handful of banks. What they said: the big banks have no quarrel with credit unions.
"They tell us it's their mid-size community banking brethren who are emotional about this," Mica told The Credit Union Journal at CUNA's Future Forum.
But if credit unions perceive a schism based on size among the banking industry, they may want to pay careful attention to ensuring such a divide-by-asset size-and-conquer approach will not be successful against CUs, as banks continue to pound out the message that it's the large CUs-defined as $100 million in assets or more-who put the CU tax exemption at risk.
"So, if you are a $99,999,999-million credit union and you take in just one more dollar, you are no longer a credit union," Mica asked. "We must be sure that we are not sold out for a single dollar."
One Midsized CU Planning To Expand Service Options-To Checking
hile other credit unions are contemplating the wisdom of getting into member business services or more "nontraditional" offerings such as financial planning, one "plain vanilla" credit union is finally looking at share drafts. But this isn't some tiny $2-million operation; it's $180-million C.S.E. FCU in Sulphur, La. The credit union is putting the finishing touches on its business plan right now, according to two of its board members attending CUNA's Future Forum who spoke with The Credit Union Journal.
CUNA's PAC Now Sixth Largest Trade PAC, and 11th Largest Overall
CUNA's PAC, CULAC, is now ranked the sixth largest trade association PAC and the 11th largest PAC overall in the nation with a record $3 million in its coffers. Deciding how to use that money can be a real challenge, according to CUNA's John McKechnie. "We don't want to use it on the slam dunk races, because we'd rather use it in races where we have a real opportunity to make a difference," he told The Credit Union Journal at CUNA's Future Forum. "But we also need to set aside money to give to candidates who have always been there for us." Among the races credit unions should keep a close eye on are open seats in Colorado, for example, where Salazar is going up against Coors; and difficult races like the one faced by Phil Crane, a Republican from Illinois who has been "a real friend to credit unions in the House Ways and Means Committee," he advised. "One of the goals is to find a credit union friend and to see that lawmaker go from a supporter to an advocate," McKechnie added.
Comedian Gets Return Engagement To Host CUNA Future Forum
Presidential Election To Have Consequences For NCUA Board
The presidential election is easily the most hotly contended of races, and while both candidates have offered their support of the CU tax exemption in writing, it is still race that will have huge implications for credit unions, according to CUNA's John McKechnie.
"It's pretty much a wash on the tax exemption, but what credit unions need to look at, then, is what kind of executive branch style do you want," he told The Credit Union Journal at CUNA's Future Forum. "The next president will nominate two-thirds of the NCUA board within the first 12 months of his term."
Indeed, by the end of the next president's term, the winner of this election will have had the opportunity to appoint three new members to the NCUA board, which could mean a total "makeover" for the federal regulatory agency.
CUNA Closes Out 2003 In The Black
CUNA reported its treasury was in the black for the year ended Dec. 31, 2003 fueled by a 10.5% increase in fee-based service net revenues as well as a 6.5% increase in dues income. Leasing its vacant Washington, D.C. office space and combining CUNA Network Services with Liberty Internet Services also helped contribute to the swing of $2.6 million over 2002's results, according to CUNA Treasurer Allan Kemp McMorris. Operating revenues increased by $2254 from $42,527 in 2002 to $44,781 in 2003, while operating expenses climbed by $2,145 to $$44,601 in 2003 up from $42,456 in 2002. CUNA's operating margin is $109,000 better than the previous year, McMorris pointed out, noting revenues, net of cost sales, are $2.2 million, or 5.3%, ahead of 2002, offset by expenses coming in at $2.1 million, or 5%, higher than the previous year. CUNA ended 2003 in the black with an unaudited change in net assets (net income) of $448,000.
