The Christmas Gift 104,000 People Don't Know They Got

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Considered extremely rare, The Credit Union Journal has nonetheless obtained a copy of a letter from Santa. We're not saying who leaked the letter to us, other than it was someone who is stature-challenged and is employed in a workshop, but that's all we're saying. Apparently, Santa was prompted to pick up a pen (word is he still refuses to use a word processor) and authored this letter to members of a certain credit union.

Dear Member of Lake Michigan Credit Union:

As I've just about finished my to-do list as we wrap up Christmas 2004 and before me and the Mrs. head off for a month of R&R in Miami Beach (there are still some places where an overweight, pale-as-a-snowball old couple can go unnoticed even in undersized bathing attire), I wanted to pen this letter to you, because the best gift you got this year won't be found under the tree.

Santa likes the simple things, so let me explain it to you this way: this year you got to keep your money! Oh, I know you may be more focused on that high-def, big-screen TV (those things aren't light, you know, especially on a cold night when Santa's arthritis is kickin' like Blitzen) or jewelry or fancy wardrobe (don't blame the elves, we make the clothes in the size you claim will fit), but what you ought to be thanking your lucky North Star for is that your credit union is still a credit union.

People don't know what they have until it's gone. That's been true from the days folks in Holland first starting calling me Sinterklaas, and it will be true for Christmases far into the future. Had enough of your fellow members voted in favor of a charter conversion, your credit union would have become their bank. As I said, I like things simple, and I don't know that I can make it a whole lot simpler than that. But just as is the case with some of the pants sizes and dress sizes that I noted earlier, often people see what they want to see-or are told to.

One of the things I would have liked to see this year would have been more of you at the credit union's special meeting to ask questions about the conversion process-let me just warn those of you not in attendance that you're starting out on the "naughty" list. Oh, I know you were busy with your shopping and extra shifts at work and the kids' school play, but if someone were talking about taking away your house you'd make time for that, right? I know when you've been sleeping, I know when you're awake-and I also know that only about 160 of you showed up at the special member meeting: that left about 104,000 of you who didn't take time to ask some hard questions that needed to be asked. From my travels I know you gotta put the "demo" in "democracy."

Ol' Santa's seen a lot in his day and one thing I've witnessed more often than the fake fireplace log is how often pathetic things happen to the apathetic. Nothing frosts Santa's hot chocolate like a wonderful gift that goes ruined by neglect. And not asking harder questions of your board-which is supposed to look out for everyone's interests-is just plain neglect. Oh there were a few of you-I was particularly happy with the members who asked at the special meeting on the conversion, "Is this based on what's good for the majority?" and "I have yet to see how I will benefit"-but where were the rest of you? I had some questions myself-but it's hard for me to blend incognito into a crowd-such as "If the credit union is having trouble growing, how did it get to be a billion dollars?" And if the credit union's motto is now, "Where you and your money belong," what will it be if it becomes a bank: "Where you're welcome to visit, but your money stays?"

Allow me to let you in on a little secret that my helpers probably don't want me to share: the best gifts don't come with a price tag. There's a reason a bank has a stock price and a credit union doesn't-you can't put a value on what the credit union represents.

But some people-and they're on my double-naughty list-know that while everyone benefits a little from their credit union, a few can benefit a lot by turning the credit union into a bank and selling off your equity. Now Santa knows when you've been bad or good-so what do you think I concluded after one of my elves in the North Pole Finance Department pointed this out to me: As of Sept. 30, 2004, Lake Michigan CU had $91,530,295 in total equity, an increase of $6.5 million since June 2004 and $22 million from one year earlier. The net worth ratio grew faster than asset growth over that same time, to 8.3% from 7.8%. Its profitability increased to 2% over the same time.

Even elves who had been pulling double-shifts and knocking back some of Mrs. Claus' special eggnog could see what was going on there. Not bad for a credit union that said it needed to become a bank in order to compete-and not bad when the profits from a conversion come from how much equity you have to sell.

So, listen up all you members of Lake Michigan Credit Union. Instead of sending me a thank you note this year (and a whole bunch of you could introduce your kids to the concept), send a thank you note to the 40% of members who voted against the conversion, to the state regulator for requiring a two-thirds majority to convert, and to the Michigan league for standing up for what CUs say they believe in. Because you just avoided getting a piece of something, and it wasn't coal.

Frank J. Diekmann is editor of The Credit Union Journal.

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