Why Two CEOs Formed 'Center'
A group championed by two well-known credit union CEOs to respond to attempts to convert credit unions into banks raised more than a quarter-million-dollars in pledges to underwrite its efforts during a short time at CUNA's GAC.
Sebastian sat outside the trade show doors at GAC flagging down every CEO he knew to make his pitch, urging fellow CEOs to pledge a thousand dollars per hundred million dollars of assets. While some declined, Sebastian had secured $260,000 for the National Center before GAC had even concluded. He said the national Federation of CDCUs has also provided an endorsement. One year earlier at GAC, NFCDCU Director Cliff Rosenthal had criticized such charter conversions while accepting his Wegner Award.
Sebastian said a variety of issues led to the creation of the group, which bills itself as an advocacy organization to promote the value of the credit union charter, but the primary driver is credit unions that have been converting to banks. "There are groups out there that are trying to promote the abandonment of the credit union charter," said Sebastian. "They are not acting in the best interests of the American people."
Sebastian said the group will be actively soliciting donations to underwrite specific efforts to communicate with members of credit unions seeking to convert. He said it has been in touch with members of DFCU Owners United, which is opposing the conversion attempt by DFCU Financial Credit Union. "We want to spend money to help fund efforts where members of the board have decided to change charters so the other side of the story can be told," said Sebastian. "The credit union has all the resources at this point."
In the case of DFCU Financial, Sebastian said the National Center for Member Trust will be providing funding for four billboards, some mass media advertising, advertising in publications that go to Ford employees (DFCU Financial was originally a Ford credit union), and to send a letter to every member of the credit union.
"I think we will be extremely successful," said Sebastian. "The alternative is devastating. I think it's appalling that, figuratively speaking, the day after Ford announced it would be closing 12 plants and laying off 30,000 people that the board announces the credit union is going to become a bank. Detroit doesn't need another bank."
What is needed, said Sebastian, is someone to tell the other side of the conversion story to members who currently receive disclosure materials only from the board of directors. "You can't expect members to understand" both sides of a conversion, he said. "They have day jobs. They trust their boards and senior management. Somebody has to tell them the truth."
In addition to working contacts at the GAC, Sebastian said he will also be contacting fellow CEOs among the numerous groups to which he belongs, including the Credit Union Roundtable for larger CUs. "I would expect a sympathetic audience from everyone I talk to," he said. "I want all of my colleagues to stand up and be heard."
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