Underserved People Who Are Being Under-Talked About
We shall remember not the words of our enemies, but the silence of our friends. - Martin Luther King
There will be so much talk of "service" and the "underserved" this week in Washington that you'll have to excuse those who mistakenly think they are at Wimbledon.
Too bad one of the most critically underserved groups of all will be even more, well, underserved.
With credit unions out in force this week in Washington Hiking the Hill, the Hilton and the Hallways as part of CUNA's GAC, you can count on much discussion and debate in response to what was essentially a challenge from California's U.S. Rep. Bill Thomas during hearings in late 2005 that credit unions demonstrate they deserve their tax exemption. This is a victory for the banking industry, which first prodded Thomas to hold the hearings and second, has managed to strongly link the tax exemption with service to the so-called "underserved," who until recent times were known as poor people.
It's important to be able to defend the tax exemption to Congress, but there is a far larger group of underserved people, in this case tens of thousands of people, who need you to come to their defense. They are the members of credit unions whose boards have ceased defending member interests in favor of their own personal interests by attempting to turn the credit union into a bank. And to date they've been underserved by the credit union community to the point of being ignored. That's a bad idea.
Like Dick Cheney shooting his hunting partner at a time President Bush is trying to sell a new domestic energy program, often the best-laid plans can be overshadowed by other events. Conversions by CUs to banks is a fine example, lost in the glare from the Thomas hearings.
Charter conversions are a core consumer issue, and if you don't know much about how they "work" or why it matters, you should. As if anyone didn't already suspect it, a new study shows that CUs that converted to banks charge more for loans and pay less on deposits than do peer group CUs (see related story, page 1). Were you as shocked as I at the news?
It's ironic that credit unions have never been better organized or better financed (something there will be much crowing about at GAC), and yet banks continue to drive so much of the credit union agenda. That includes not just what appears to be an impending CRA-like plan for federal charters, but even the milquetoast responses from the CU trade associations to the conversions. The trade groups straddled the fence by arguing conversions are up to the membership, and you'll find no stronger advocate of controlling one's own destiny than myself. But to fully control your destiny, you must be fully informed, and as has been noted here more than once, no fully informed member would ever say, "Sure I cast my vote in favor of you small group of people taking my vote and my money for yourselves!"
A credit union is converted because a small group of insiders is able to empty the communal till into their wallets. The Credit Union Journal's Ed Roberts has done extensive reporting on the millions of dollars that have flowed into the personal savings accounts (they certainly aren't share accounts) of executives and board members at CUs that have converted.
The members-turned-customers of these former credit unions are among the most underserved of all. Underserved because those who know better never did much then and aren't doing much now to make darned sure members' interests were and are adequately represented. (There are some exceptions. Michigan league CEO David Adams, who has been unfairly criticized by some, and NCUA Chairman JoAnn Johnson have both overseen efforts to shine a light on some shady folks working in the dark, and both deserve some applause).
Most of all these members have been underserved by their very own elected representatives. Just look at the attempt by DFCU Financial credit Union in Dearborn, Mich., which is using the same playbook as some other recent converts. As The Credit Union Journal reported Feb. 20, members who turned out for the $1.8-billion CU's annual meeting, which was the first time they were permitted to ask questions about a conversion attempt already well underway, didn't get many answers. Executives declined to answer member queries about their future windfall, and board members initially hid in the audience before finally agreeing to move to the front of the room. Members of the supervisory committee, who are supposed to watch the board, have been bought off and will become board members (with the accompanying riches) if the conversion is approved. And, of course, once again a CU seeking to convert is dangling cash prizes for votes. What's a couple of thousand bucks now when there are millions to be had later (hey, either way, it's the members' money).
In this issue, beginning on page 25, The Credit Union Journal publishes an extensive look at the history of those who fought for credit unions and the tax exemption. It's a proud history; now it's time for folks to add their own chapter. Indeed, providing assistance to groups working to get more info to members of would-be convert CUs would seem to be a ripe challenge for the CU community's Development Educators.
This week, too, the credit union community will bestow its highest honors with the Wegner Awards. The winners are all deserving. But it's also time to recognize those who have fought conversion attempts (such as the new board at Columbia CU in Washington) and those who are fighting them (such as the group calling themselves DFCU Owners United, about which you can find out more at www.savemycu.com). That's who really deserves a little podium time at GAC.
So speak up now. Because the day may come when you need someone to speak up on your behalf, and that's a lousy time to find yourself underserved.
Frank J. Diekmann is Editor of The Credit Union Journal.