'Unjust Enrichment' A Red Herring In Debate
Editor's Note: This is an excerpt from a statement released just prior to a congressional hearing on credit union conversions.
There is no such thing as "unjust enrichment" in this highly regulated conversion process.
The office of Thrift Supervision and the Federal Deposit Insurance Corporation have been safeguarding members' interests in mutual-to-stock conversions for more than 30 years with no negative impact on public policy. CUNA's harping is like Chicken Little screaming that the sky is falling.
Apparently, it is unable to defend NCUA's anti-conversion meddling and lack of objectivity and so it plans instead to toss a diversionary "grenade" into Congress' deliberations about the Credit Union Charter Choice Act.
We believe that it goes a long way toward creating a fairer and more reasonable conversion process. Under the law, NCUA is only supposed to be ensuring a conversion vote is carried out fairly. It shouldn't be second-guessing motives and acting as an adversary against the credit union's leadership. Clearly, NCUA has overstepped its bounds by imposing a host of meddlesome regulations on the conversion process in 2003 and 2005, and planning for more in 2006.
What amazes us at the Coalition for Credit Union Charter Options is that a few otherwise smart people in the credit union industry do not understand mutual savings bank conversions or the mutual savings bank structure.
It is an indisputable mathematical fact that a mutual savings bank can hold more assets, accept more deposits, make more loans for its members and do more for its community than a credit union with an equal amount of net worth.
Our astonishment is further compounded by CUNA's apparent willingness to parade this ignorance in front of Congress. Quite frankly, the anti-conversion critics' attacks on compensation are without merit and self-serving. And in the context of NCUA's capricious administration of the conversion process, this fear-mongering is entirely beside the point.
CUNA should be protecting the rights of credit unions, and their members, from NCUA's efforts to impede, and ultimately stop, conversions. Instead these CUNA spokesmen would rather defame the integrity of fellow credit union managers and board members.
For management, charter conversion and a minority stock issue bring a whole new level of accountability that the credit union charter currently lacks.
If CUNA is really concerned about unjust compensation, it should support full disclosure of every credit union CEO's compensation. We hope that CUNA's spokesmen are prepared to answer that question when they appear before Congress next week.
Lee Bettis is the executive director of The Coalition for Credit Union Charter Options.