In Superman and Seinfeld there's a place called the Bizarro World. The earth is a cube, Superman is a weakling and the evil Lex Luthor has super powers. Jerry becomes an airhead like Kramer and Kramer becomes the fastidious Jerry. Credit unions have apparently entered the Bizarro World. Here's the evidence:
On the day that Bernie Ebbers, the former CEO of Worldcom, is sentenced to 25 years in prison for bilking tens of thousands of investors out of their savings, the freshman Congressman from the 10th District of North Carolina introduces legislation (H.R. 3206) that would make it optional (as determined by those promoting charter conversion) to let credit union members voting on conversion to a bank know that they will likely lose ownership rights and control, that their institutions' structure including costs and benefits will change, and that some insiders including the CEO stand to gain windfall profits in the process.
After a grueling couple of years of American business dealing with Sarbanes-Oxley legislation including improved corporate governance, transparency and demands for ethics to return to the board room, 22 congressional legislators and both senators from Texas and the ranking minority member of the Financial Services Committee from Massachusetts strongly recommend that the National Credit Union Administration waive any objection after a converting credit union fails to present the information in a manner and in the agreed order that ensures that it objectively communicates the likely impact of conversion on their member-owners.
Every Tom, Dick and Harry, from former credit union CEOs-turned-bankers to senior banking regulators to lawyers seeking to profit from conversions feels free to throw mud at credit unions and their regulators and extol the virtues of the for-profit banking sector that consistently rates well below credit unions in consumer preference, value and trust surveys.
America's Community Bankers, The Independent Community Bankers of America and the American Bankers Association all want to support credit unions that long to mend their ways and become banks. They are also eager to stand up for the smaller credit unions that are harmed by anything that helps the credit unions that have been successful in serving their members and growing over the past 50 years or more. They don't detail what will happen when those smaller credit unions become successful.
A bank that moved into a North Carolina market from West Virginia two years ago is appalled that a credit union that has served the community for the last 53 years has moved into a new building and has "snagged" $1 billion in assets. No matter that the community built the credit union and improved their families' financial lives via lower loans rates and fees and earning higher savings rates or that the credit union has paid over $1 million just in property taxes over the last six years. Any bank and their trade groups reserve the right and have the requisite arrogance to criticize to any credit union any time, anywhere.
The American Bankers Association suspects they may be operating in a Bizarro World and decides to place the threat of terrorism in the No. 1 priority position above the annihilation of "complex" credit unions.
Some credit union CEOs tell their highly effective trade associations (CUNA and NAFCU) and their lobbying arms to lay-off the bank conversion issue, which could eventually transform hundreds of credit unions into for-profit banks and result in the loss of billions of dollars worth of benefits to millions of credit union members.
Some credit unions and their allies are working feverishly to create more banks and fewer credit unions in markets like suburban Dallas, one of the most over-banked markets in the country. Meanwhile bank mergers pick up speed with three $1-billion-plus dollar bank mergers announced in a four week period in midsummer.
To exit Bizarro World, Superman has to regain his powers and rotate the earth counter clockwise until it returns to the globe we know and love. (Don't hold me to that Superman cultists-that's the way I remember it from when I was about 12 years old).
To exit the credit union Bizarro World, credit union leaders, CEOs, boards, members, business partners (SEGS), and anyone who believes that our member-owned financial cooperatives are highly effective in providing affordable financial services to millions of Americans will have to put their collective shoulders to the political and mass communication wheels and start spinning us in the opposite direction.
Marcus Schaefer is President/CEO of Truliant Credit Union, Winston-Salem, N.C.
