The Road To Rome
Bon journo. Below is a look at just what in the world was going on when credit unions from around the Earth met here for a conference.
The World CU Statistics
The World Council of Credit Unions' held its first-ever (at least in name) World Credit Union Conference (perhaps the WOCCUWCUC?) here. The meeting is an amalgamation of the triennial International Credit Union Forum, annual Leadership Institute, and annual general meeting it previously hosted.
Representatives from 41 countries were on hand for the event, creating a large group of almost 1,200 people for the meeting. Of those, 455 were from the United States, followed by 195 from Ireland, 87 from Canada, and 77 from Australia.
Countries sending just one representative included Gambia, Germany, Ghana, Haiti, India, Pakistan, Saint Kitts and Nevis, South Africa, Switzerland, Ukraine and Zimbabwe.
The World Council reported that total credit union membership is now 136-million people in 91 countries, and that there are 43,000 credit unions around the world. The two newest CUs can be found in Afghanistan.
Total assets are $835 billion (although as Americans discovered, that dollar doesn't go as far as it used to).
The Payday Hotelier
What payday lenders are to interest rates, the Hilton Cavilieri Hotel was to room charges and food costs. Generating as much discussion among attendees as the program's agenda and credit union issues was the near-predatory pricing of the host hotel. A cup of bean soup in the restaurant? About $25. Hamburger? About $34. Club sandwich? About $31. Cup of coffee or a Coke (a 12-oz can, not shares in the company)? About $11!
The prices were enough to send anyone for the relief of the hotel pool. But don't expect a freebie there either. A chair cushion and a towel? Just a bit more than $20.
The hotel's prices had many participants walking the half-mile to a local market and bringing food and drinks back to their rooms. One person told The Credit Union Journal he was so happy to be able to buy two Cokes for a bit more than three Euros that he tipped the astonished shopkeeper two Euros.
Finally, in a sure-sign of how overpriced the Hilton was, in a meeting of more than 1,000 people that included large delegations from Ireland and Australia, the lobby bar was empty on most evenings.
Traveling In The Dark
Hidden behind all the headlines surrounding the fraud at Enron was another ethical breach for the company's employees: they were forced to use a travel agency owned by then-Chairman Ken Lay's sister to book all company-related travel.
Particularly aggravating, according to former Enron exec Sherron Watkins, was that the agency was inept. The travel agency, called Travel Agency in the Park, was better known within the company as "Travel Agency in the Dark," noted Watkins. "This hurt morale. We were all aware of this. It sent a horrible message throughout the organization that other executives heard. It may seem trivial, but it sent a message," she told the meeting during her keynote remarks.
Speaking of Watkins, during the Q&A, one person stood to ask her if the real fault for the Enron scandal didn't actually lie with former President Bill Clinton.
Maximus Bad Coveragus
For the second year in a row, Ireland's credit unions took some heat in the Irish press over the cost of sending credit unions to a resort location for a conference. In 2004, there was extensive coverage in Dublin's newspapers of Irish credit unions traveling to the Atlantis Resort in the Bahamas for a World Council meeting, with the coverage focused on how the untaxed cooperatives aimed at helping the working man were traveling to a ritzy resort. This year the attention was somewhat lessened for the event in Italy, according to Liam O'Dwyer, president of the Irish League of Credit Unions. Still, one newspaper story about the Rome meeting was headlined, "Junketus Maximus." In 2006 Ireland's credit unions should get better coverage: the World Council meeting is scheduled for Dublin in July.
Se Habla English?
Many WOCCU sessions are translated into other languages, most often Spanish. At one session the translation service into Spanish (which is broadcast via radio to headphones) was not functioning properly, and an announcement was made asking how many were having trouble hearing. The announcement was made in English.
At a later session, Mark Cifuentes, a native Chilean who is the World Council's senior manager-development agencies, had to translate for himself when the translation service couldn't be heard.
CEO Salary Put To Vote
In a practice not likely to be embraced by America's credit unions, the members of the United Kingdom's not-for-profit, mutual building societies have the right to vote on their CEOs' salaries.
Adrian Coles, director-general of the London-based Building Societies Association, told The Credit Union Journal that during the annual meeting of every building society each year members in attendance cast their votes on a number of issues before the society, including the CEO's pay.
Coles added that those same building societies faced a similar round of demutualizations, or charter conversions, a decade ago that are currently being dealt with in the U.S. "The most marvelous thing for a complacent organization is a good kick in the backside," he said of the demutualizations.
Questioning American Sanity
Speaking of charter conversions, CU representatives from Australia, Ireland and the U.K. were astonished at what is happening in the United States, not just because of the loss of co-ops turning into banks but because American CU members are giving up their vote, ownership and equity for nothing at all.
The U.K.'s Coles noted that in the case of Building Societies that converted into banks, members were offered a significant premium to vote in favor. Most members had ?100 on deposit and were offered as much as ?2,200 if the demutualization were approved. Not surprisingly, those members voted in favor of their wallets.
But what many at the meeting couldn't understand was why American CU members have been essentially voting against their wallets. The only answer to which everyone agreed: most members have no knowledge of what their credit union is or that they own it.
Four Score And 7 Beers Ago...
Observed by Gary Plank, the new chairman of WOCCU and president of the Arizona CU League: "If our forefathers had wanted us to be banks they would have stayed home and drank beer."
Helping Polish Orphanages
One Polish credit union has developed a unique means of linking a socially responsible idea with good business strategy. Jarek Debowski, product development manager with SKOK Stefczyka (SKOK is the acronym for all Polish CUs) is reinforcing its own ties to communities by introducing a program to pay a percentage of all interest on loans and credit cards to 17 orphanages throughout Poland that are desperately in need of funding.
For Americans, the World Council meetings are always an eye-opening reminder of how things used to be in the early days of U.S. credit unions, at least in one regard-the role of volunteers. The growth of U.S. CUs has meant most are managed by professionals, with the board relegated to monitoring management and setting policies. But in many countries, board members run the show. Even in a first-world country such as Ireland, volunteers are in charge at the country's CUs, most of which are small and community based. Ireland's CUs, incidentally, have a 50%-plus penetration rate of that country's population.
IRnet Expanding To Kenya
The World Council of Credit Unions has dispatched a staffer to Nairobi, Kenya for the next six months to lay the groundwork for expansion of its International Remittance Network (IRnet) in that country. IRnet, which offers a low-cost alternative to other wire transfer firms, is used primarily by immigrants working in the U.S. to send money to families back home, primarily in Mexico. But WOCCU CEO Pete Crear said the group believes there is substantial opportunity now in the east African country for remittance services.
Guidelines Are Nice, But...
During its World Conference here, the World Council of Credit Unions unveiled a new set of operating principles designed to guide ethical decisions at credit unions around the world. But the more than 1,000 people attending the meeting here also heard from a former executive with one infamous company who noted that also had a code of ethics in place: Enron.
Shared Branching, Southern Style
While shared branching is most widely practiced among U.S.-based credit unions, two credit unions from Central and South America are taking the effort to greater lengths. In Nicaragua, Mark Cifuentes, senior project manager with WOCCU, said that country's credit unions have seen robust growth since joining together in a network of 24 facilities. Similarly, he noted that credit unions in El Salvador now share more than just a network; branch design is similar at each facility as are graphics.
In Brazil, Manfred Dasenbrock, VP with Cenrtral Sicredit (SICREDI), said the 133 SICREDI credit unions now serve 888,382 members through a whopping 858 branches, all share common signage (a stylized green and yellow windmill) and common branch design elements.
One theme always apparent during any World Council of Credit Unions (WOCCU) event is a view by some in developing countries that U.S. credit unions have grown so large they no longer fulfill their "social mission." That led one person from outside the U.S. to question CUNA CEO Dan Mica whether the need to form community development credit unions (CDCUs) to serve low-income markets is an indication developed CUs are no longer serving those areas.
"Clearly the larger a credit union gets the more effort they have to put into reaching the underserved," said Mica. "But I would say that credit unions large and small do a better job reaching out to the underserved. We're trying to help them keep their eyes on the ball and are developing programs and templates for them to use. I think we're 70% to 80% there, and we can do a better job. But there is also no bank in the world that only lends to people who cannot afford it. If you do lend only to those who can't afford it, the regulators will shut you down."
One American credit union rep who visited a local "one-hour" photo store in Rome at 1:00 in the afternoon was told the photos would be ready by 4:00. When the American objected that this was far more than an hour, it was explained there is a local caveat: the store closes for a siesta in the afternoon.