Leagues in Texas (After Hot Debate), Illinois and Colorado Raise Dues

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Three state credit union leagues are looking to increase their dues and change the way they are assessed, including one state that is considering a change that will bring in an additional 40% in dues revenue.

The Texas league, April 18, overwhelmingly voted for a dues restructuring that would mean an increase of approximately 14% in the total dues assessed. The new dues structure, to be phased in over two years, followed a fiery debate at its annual meeting.

"We anticipate growing our total dues by about $250,000 the first year and then an additional $250,000 the second year," said Bob Gallman, COO of the league. "It's been about 10 years since our dues were restructured."

Previously, dues were assessed based on a credit union's asset size and its number of members. Now, dues will be based only on asset size, with no cap on total dues.

'Important' Change

"That was really important," said Dick Ensweiler, CEO of the league. "The big credit unions have been really good about this. This will allow us to grow with them a little bit, and that's going to help."

Ensweiler acknowledged, "It was very hotly debated. The one thing we didn't get through was the cost of living increase. But if there was one we had to give up, I'm glad it was that."

The cost of living increase would have allowed the board to automatically increase dues every five years in tandem with cost of living statistics.

"Ironically, the people who were most vocal about it were people who said they were really going to get hit (with a significant increase due to the new structure), and if we'd had something like a cost of living increase, they probably wouldn't ever get hit like that again. It would be a much more gradual change," Ensweiler told The Credit Union Journal.

Among those who protested the automatic increase was Greg Storch, CEO of U.S. Employees CU, The Woodlands, Texas. Despite the heated debate and some noses bent out of shape, Storch said the process of doing the dues study and putting the proposal up for debate is the very reason he opposed an automatic cost of living adjustment to dues.

"I thought the league, the dues committee and Terry McCormick (outgoing chairman of the league, whose final duties included chairing that meeting) did a good job, and everything that was said on both sides was decorous and appropriate," Storch told The Journal. "I like the process by which a group of credit union people review the needs of the organization, and I think that's somewhat better than some sort of automatic adjustment that might not meet the needs of the league."

Still, just that one portion of the debate took close to an hour and so bogged down the proceedings that any of the other issues people may have wanted to raise got lost in the process, Ensweiler suggested. That included a proposed amendment that would have required the league to publish its "downstream investments." While the league will make that information available to any league member who requests it, TCUL wanted to reserve the right not to have to make that data public in a public meeting like the annual meeting. "But by the time that finally came up, it just went down in flames," Ensweiler noted.

Texas isn't the only league that decided it was time to overhaul its dues system. During its annual meeting in Chicago, the Illinois CU System also approved a dues increase. The 3% increase was expected, as it had already been included as part of the ICUS' five-year plan.

The ICUS structures its dues at 1.97% of gross credit union income to $347,783, plus 26 bents per member. The minimum dues for credit unions in the state is $115; the maximum $21,118.

"Next year, we'll be looking at presenting a bylaw amendment that provides for an automatic increase," said Vicki Ponzo, ICUL senior VP-member services. "Part of that will be to reformulate the dues structure to provide relief for some of our smaller credit unions."

Colorado Seeks 40% Increase In Revenue

The Colorado CU System, meanwhile, will be seeking its first dues hike in 20 years, according to CEO Carroll Beech. A special legislative fund that some CUs in the state volunatrily contributed to will be rolled into the dues so that the cost of those legislative resources will be spread among the entire systems' membership instead of just the 20- 40 CUs that have voluntarily contributed to it over the years.. "It will mean a 40% increase in the dues we see coming in, but it's not an across-the-board 40% dues hike," Beech explained. "Many of the credit unions that had been contributing to that separate legislative fund will see no increase at all." The dues increase, already adopted by the CCUS board, will be voted on by the entire CCUS membership on May 3, Beech said.

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