The Courage of Convictions, The Conflict of Predilections
So what would you do in this scenario? You're about to take the stage before more than a 1,000 people and you're following a speaker who has turned an already pro-credit union crowd into a group of rabid CU cheerleaders, half of whom would have agreed to an Ed Filene tattoo right then and there if asked. Yet you don't completely agree with the previous speaker's message. Indeed, some of what you're prepared to say, if you actually go through with saying it, is going to feel like being the prohibitionist at the National Brewers' Convention, the tax proponent at the Libertarian picnic, the anti-needle guy at Barry Bonds' house.
Those were just the odds Bob Hoel faced in Las Vegas a few weeks back at the National Directors Conference when he followed to the podium Continental FCU CEO Tom Glatt, who had used no notes because, as he said, "I'm speaking from the heart." I found myself thinking I might have followed Glatt's impassioned remarks against the "hostile takeover" his credit union faced by striding to the very same podium, pointing right at Glatt and loudly announcing, "What he said!" I would then promptly stride back off the stage as the crowd cheered even more loudly. But Dr. Bob Hoel did nothing of the sort, and for that he deserves a fair amount of applause of his own.
Instead, he began with the kind of understatement you'd expect from a former college professor-"I have a different view"-followed by a reasoned, steady presentation of his case. By the time he was done it was like watching the movie "12 Angry Men" in the way he had moved the audience from one position to another. Although Hoel joked that he had a car ready and waiting just outside in the event of an audience revolt, quite the opposite occurred. Hoel challenged the assumption a so-called "hostile takeover" is hostile at all, and went so far as to suggest that the Continental FCU members were denied the right to make their own decision.
"What's wrong with the member gathering the facts and having the right to vote on the merger?" he asked. "Are we so afraid of the member? If you're really serving your members they are not going to merge or convert."
Hoel may or may not have been right, but that really wasn't his point. What he sought to do was to get the group to at least consider another, albeit initially unpopular, point of view. It must have worked, as he never did need that car.
* Credit Union Journal, and by default all credit unions, recently got a review from R. Dale Nichols, chairman of the Oklahoma Bankers Association, in the OBA's publication. In the event you're not a subscriber, you may not be entirely shocked to learn credit unions did not get two thumbs up.
A wee bit after the fact, but this case Nichols was reviewing was the credit union-to-bank conversion process and, in particular, the conversion of Community CU (now ViewPoint Bank) and OmniAmerican CU (now OmniAmerican Bank). He suggested that NCUA, which he called a "cheerleader for the credit union cause, truth and right notwithstanding," had rejected the disclosures the credit unions had provided to their members, or "members," as Nichols prefers to refer to them (think making those little quotation marks in the air) because the disclosures had been folded wrong. "This is not a joke," he noted, just because we're always tempted to believe a banker is going to go stand-up on us. "This has really turned into an absurd process and shows the lengths to which credit union advocates and supporters will go to maintain the status quo, regardless of what may (or may not) be best for taxpayers."
But Nichols does go on to make a point credit unions should be prepared to respond to. He pointed to the second of the two disclosures required of the converting CUs, that "Credit unions are exempt from federal tax and most state taxes. Mutual savings banks pay taxes, including federal income tax. If (Community Credit Union) converts to a mutual savings bank, these additional expenses may contribute to lower savings rates, higher loan rates, or additional fees for services."
"Don't you just want to say, duh?" Nichols opined. "Really? Ya think? And why would that be important if they can do anything and everything that tax-paying financial institutions can do? Which, of course, they can.?? Just goes to show you how nuts this argument can get."
There is certainly some nuttiness in this debate somewhere. Those credit union-to-bank converts consistently cite the advantages they will have as banks-greater ability to compete, no membership restrictions, greater access to capital, etc. But the bank trade associations and especially the community bankers can't make it across the lobby without pointing out that at least that floor is level, which is more than they can say about the bank/CU playing field.
By the way, Nichols throws in another bromide the banks have been using, which is that credit unions don't "help pay for the national defense or homeland security like the rest of us do."
Incidentally, on a brighter note, Nichols also referred to a "Bankers' Night Out" that will be "coming to a community near you very soon." Keep your calendar open and we will see you there.
Can you say PARTY!
Frank J. Diekmann can be reached at email@example.com.