NAPERVILLE, Ill. — The decision by the Illinois Credit Union League to ban volunteers from its board of directors last year has been panned by some in the community, but a league representative said it was a necessary step approved by delegates.
Vicki Ponzo, the league's SVP of member services, said the change was put in motion by a decision in 2009 to reduce the size of the board from 24 members to 12. There also was a revision in the way directors were elected, she noted.
When these changes were made, the league's board and management examined the increased "complexity" not only with league issues, but also the issues that go with the league's service corporation, according to Ponzo. "We had already started losing volunteers as board members, and with complexity up, we looked into requiring the position be limited to senior management at credit unions," she said.
In the case of the service corporation, Ponzo noted it operates in 49 states with various products.
"There are so many products and services it requires a lot of time for due diligence," she said, adding the product line includes credit cards, pre-paid cards, travel cards, gift cards, teen cards, mobile apps and other transactional programs that are offered to credit unions. "There are many compliance and due-diligence issues involved and these can get very complex — sometimes more complex than a volunteer is expecting to have to do."
In May 2013 — after four years of discussion — the board enacted the rule barring volunteers. The proposal first was voted on by the board, then was approved the delegates at the league's annual meeting. "We heard virtually no negative comments," said Ponzo. "Only two or three 'no' votes came in, so for us it was a non-issue."
The Illinois CU League's foundation board and PAC board still are open to volunteers, Ponzo said.
"We invite our 24 chapter chairmen, who may or may not be volunteers, to attend a league board meeting and sit in. It is not that we do not want the input from volunteers, it was just a specific job."
Differing Opinions
Nevertheless, the idea that volunteers are not "savvy" enough to do the job for the ICUL rubbed some the wrong way.
Jim This, president and co-founder of the Paragon Group, Olympia, Wash., acknowledged that complexity of organizations in the credit union movement has increased, "but I do not necessarily agree volunteers would not be able to understand league operations."
"When leagues are selecting directors they have to make sure they have a diverse representation of large and small credit unions, and from different areas of the state, but also be good lobbyists and champions of the league in their state," said This. "As credit unions become more complex, I think volunteers still provide a very valuable role."
Fifty years ago, This pointed out, CUs had credit committees comprised of volunteers that approved loans.
"Many of those functions that volunteers used to handle have been turned over to management, but volunteers still have a lot to offer," This added.
Pete Weldon, who is chairman of the National Association of Credit Union Chairmen (NACUC), and chairman of the board at $206 million-asset 1st Community FCU in San Angelo, Texas, minced no words.
Weldon said all of his board members are required to go through a volunteer achievement program and have to get education from webinars and conferences.
"We have had CPAs and accountants on our board, so there is a tremendous background," Weldon said. "As chairman, it is my job to make sure everyone can understand everything that goes on in the credit union, from the balance sheet to Bank Secrecy Act compliance. I rotate people on the committees so everyone has a broad view of everything. I expect everyone on the board to have ready every by-law and policy we have. I do not buy the argument that league business is too complex for volunteers. That is insulting.
"I am not sure what Illinois is doing is legal — if they tried to do that in Texas we would challenge it," Weldon added.
Decision Doesn't Make Sense
Mark Lynch, a credit union consultant now based in Sault Ste. Marie, Mich., specializing in growth strategies and board management, said the decision to ban CU directors does not make sense to him.
"What Illinois should be doing is, instead of making a blanket ban, is clearly state what the skills and qualifications needed are. If directors qualify, then let them on," Lynch said.
Chuck Fagan, president and CEO of the Credit Union Executives Society in Madison, Wis., said he is not familiar with the operations of the ICUL, so he felt he is not qualified to discus their business.
However, Fagan continued, "the pool of talent coming from credit union executives is very deep so that is a natural fit. Our membership at CUES is CEOs, future leaders and volunteers, so we look to maximize involvement. We have a number of different programs pointed right at directors. We are trying to figure out a structure that involves volunteers."
