The Reason Certain People Aren't Welcome In Paradise
If the work is good, then the person becomes excellent, and if you are excellent, you will leave a legacy for the future.
It's fascinating how fundamental truths are universal and how, in the case of the proverb above, a truth arrived at by ancient peoples living on an island far removed from all others, could so apply to a group of visitors to their islands centuries later.
I was speaking recently to a group of credit union volunteers, and as part of my remarks spent some time talking about the issue of credit union conversions to mutual savings banks charters. I was upfront from the outset with the audience that I've been a critic of the process-and I would emphasize, the process during which little relevant information is provided to voting members who stand to lose everything by the insiders who stand to gain everything.
At the end of my remarks one woman who's a credit union director approached me and announced that she had a question. Here we go, I thought-here comes some criticism that I didn't give the boards of converting credit unions a fair shake. But that wasn't what she wanted to know at all.
"Why doesn't some member file a lawsuit against the board at these credit unions that convert?" she asked. Before I could even respond that that's a question I've wondered about, spoken to various attorneys about, and written about in this space, she continued, "Why isn't this a violation of a board's fiduciary duty to act in the best interests of the membership? At our meetings, our fiduciary duty is something we talk about quite often. I just don't see why some member hasn't filed a lawsuit over this."
As is always the case after I finish speaking there is a crowd, usually made up of people who threw spoiled fruit at me during my remarks who want to know if they can have it back so as to throw it again during my second presentation, so I didn't have much of an opportunity to answer her questions in much depth.
But the fact is the question of why a member lawsuit has yet to be filed against fellow members on the board-such as that of DFCU Financial in Dearborn, Mich., which is currently seeking to convert-is a good one. There are two answers, neither very palatable. The first is that most members are kept so in the dark by that very same board about what they're up to that members don't know what they've lost until it's gone. The second is a perverted twist on the Golden Rule of "he who has the gold makes the rules." In this case, he who has the gold can pay off the attorneys. The board typically budgets hundreds of thousands of dollars on conversion-related legal fees and, incredibly, also has D&O coverage from credit union-owned CUNA Mutual Group, meaning that credit unions are in part aiding and abetting another credit union in becoming a bank.
For a member of a credit union to file a lawsuit it would require an individual to reach into his or her pocket to cover the legal fees. Then there's the issue of finding an attorney to take on the case and frankly, it's more than a bit disappointing that of all the attorneys within the credit union community that not one has been willing to champion the cause. And finally there's the issue of suing a cooperative, which in essence is suing yourself.
Still, this board member's attitude was refreshing to hear, and it was invigorating to have been invited by the Volunteer Leadership Institute to address the meeting. That's because when it comes to conversions, the only viewpoint many boards hear is often controlled by the CEO (whose objectivity is as balanced as the weight of his wallet now vs. after a conversion) and the consultant he has brought in (who stands to profit plenty, as well). It was an even greater pleasure to have in the audience several members of the board at Columbia Credit Union in Vancouver, Wash., who got their seats by ousting the former board after it tried to convert to bank. They're the ones who really deserve to be put up on stage to share their story.
The meeting of volunteers was in Maui, and prior to commencing was addressed by a representative of the local people, a "Hawaiian Cultural Advisor," who, in addition to sharing the observation at the beginning of this column, also shared these:
* "It is not considered desecration to stand on ancestor's burial grounds. Instead, it is seen as they are holding you up and that you are standing upon their shoulders." This was interesting, as the site of the credit union meeting was the Ritz Carlton, which was relocated slightly to avoid being too close to burial grounds.
* "The motto of our people is this: What can you do that is better for the whole?"
I don't know how old that venerable "motto" is, but it's one that could be used to open any CU board meeting today. It's also evidence that anyone involved in a charter conversion wouldn't make a very good Hawaiian-and would likely be voted off the island.
Frank J. Diekmann is Editor of The Credit Union Journal.