Letters To The Editor: 'Demonizing' One Reason For Confidentiality

Register now

Credit Union Journal Publisher Frank Diekmann's column dated July 23 missed the point about the Coalition for Credit Union Charter Options' lawsuit against NCUA concerning the agency's over-reaching anti-conversion regulations. The point is that NCUA has exceeded its statutory authority by promulgating obstructionist regulations and will soon face the court's scrutiny. The legal complaint clearly outlines what is wrong with NCUA's actions and can be read in its entirety on www.ccuco.org.

The Journal's coverage should not be about who is or is not a member of the Coalition. That angle is no more than an issue-clouding diversion that encourages NCUA and its apologists to sidestep the substance of the legal complaint. I can assure you no funds from any bank or banking trade association are being used for this legal challenge, contrary to speculation in the trade press.

The Coalition counts a significant number of industry-leading CUs among its members, supporters and sympathizers. They range in size from under $50 million in assets to over $1 billion. Some may never convert charters, but they all believe that the strategic business option should remain available under reasonable rules and at a reasonable cost. NCUA's unlawful regulatory constraints on the conversion option represent an unacceptable impediment to the future evolution of these and all CUs. If even one CU believes that it has been harmed by NCUA's distortion of the charter conversion process, that is enough in itself to justify the lawsuit.

The Coalition would welcome its supporters going public. But that will only happen when the NCUA, state regulators, state and national CU trade associations, the National Center for Member Trust, and all of the other anti-conversion groups publicly announce that they will not harass, interfere with, nor cause reputation damage to any of the Coalition's members. Member CUs cite the certainty of harassment from NCUA and these anti-conversion "movement" purists as the primary reason they want their identities to remain confidential. Until these anti-conversion forces cease their persecution and demonizing, the Coalition will keep in place its strict procedures to ensure the confidentiality of its supporters.

The Journal also called on all the Coalition's member CUs to disclose their support of charter choice to their individual memberships. I hope that the Journal insists upon equal transparency for the anti-conversion forces. The CU supporters of the National Center for Member Trust should advise their individual memberships about how they donated members' money to interfere in another CU's business decisions. The trade associations should be openly accountable to all of their dues-payers by disclosing the resources expended meddling in conversion votes and lobbying government officials to obstruct charter choice. The NCUA should come clean about all the staff time and share insurance fund resources expended unlawfully fighting charter conversions instead of ensuring CU safety and soundness. That would be genuine transparency.

Marvin C. Umholtz, Membership Director

Coalition for Credit Union Charter Options

For reprint and licensing requests for this article, click here.