The Green Mountain State Has Two New Exports
Move over maple syrup, you're being replaced by something less sweet but just as sticky.
Vermont may rank 49th in population, but lately the Green Mountain State has a new contender for the No. 1 slot when it comes to native production: Odd News out of Credit Unions.
Odd News Exhibit A is the state's Department of Financial Regulation's cease-and-desist order against Vermont State Employees seeking to prohibit it from using the word "bank" and "banking" in any of its communications. Exhibit B is Vermont FCU, where members of the Occupy movement have sought board seats (winning none) and also formed a "Members Assembly" aimed at driving change.
Let's begin with the former. I think we're overlooking the obvious and extraordinarily joyous news out of Vermont: apparently, all regulatory issues and problems have been resolved! State examiners have so little to do they must be asking if they can help out around CU offices to stay busy, maybe run errands for the employees, pick up the dry cleaning, get the car's oil changed? How else do you explain a government agency that has enough time on its hands to decree the use of two commonly accepted words can't be used by VSECU?
It Just Keeps Getting Better
The state regulator is claiming that the words "bank" and "banking" are actually reserved for officially chartered banks. And that's not even the most incredible part: guess which division of the Department of Financial Regulation oversees credit unions in Vermont? You got it: the BANKING Division. As it says on the DFR's website, "The Vermont Banking Division regulators and examines a variety of entities that include banks, credit unions, lenders..." and others.
That's right: the BANKING Division has ordered one of its regulated institutions to quit using the word "Banking." Makes one wonder: if "banking" can only be used by banks, shouldn't the Division itslef have unveiled a new name for itself by now? Sure, it could default to the easy choice, Credit Union Division, but we expect more from a government agency showing this kind of snappy initiative. Maybe the State Institutions Not Called Banks Division, or STINC Banks Division, for short.
To add to the absurdity, the ruling against Vermont State Employees is being handed down by a group of, yep, state employees.
Vermont State Employees' CEO Steve Post told Credit Union Journal he suspects the Vermont Bankers Association is behind the cease-and-desist bid, and that seems pretty likely (given the overall image of bankers, maybe the VBA should push the regulator to ban them from using the terms, too).
There's an old observation that "no good crisis should go unwasted," and to its credit, Vermont State isn't letting the Madness from Montpelier go unnoticed. It has alerted the media to the fight and used its website to let members know "VSECU Targeted In 'Banking' Battle." Incidentally, that battle, which goes back five years, began most recently when VSECU began referring to itself as a "banking cooperative."
In just what you'd expect from some feisty New Englanders, Post added, "We really think that what they are doing is fundamentally unconstitutional in the way they're interpreting the law, and we're willing to defend ourselves."
If it were me, I'd be rolling out all kinds of marketing built around doing your "credit unioning" with VSECU and logging onto its "Online Credit Unioning" site.
One has to wonder what's next: surely the DFR (after changing the name of its Banking Division) will crack down on other Vermont scofflaws blatantly disregarding the law: the Vermont Food Bank, Vermont Blood Bank and all those tourist shops selling Vermont piggy banks: cease and desist, cease and desist, cease and desist!
Is this the most ridiculous dictum from a regulator in some time? I think you can, um, credit union on it.
Worth More Attention
Meanwhile, in another Vermont story that will get less attention and yet deserves more, members of the Occupy movement in the state are putting pressure on Vermont FCU. One of two Occupy members who ran for board seats was elected, and Occupy is also behind a group it has formed that initially billed itself as the "Vermont FCU Members Assembly."
That should be redundant, but frankly, it often isn't. A CU board of directors is supposed to be the Members Assembly, but as most folks know, the world's worst-kept secret is many boards don't adequately represent the diversity of the membership. Moreover, the Occupy folks argue that, in this case, VFCU's annual meeting is poorly attended, there is no opportunity vote online for board members, and there is little to any board turnover (hardly unique to VFCU).
Indeed, this isn't to single out Vermont Federal: I recently played golf with two 25-year board veterans of an East Coast CU whom I'm pretty sure aren't fretting over the next board election.
As the story on page 1 notes, the Occupy rep on the VFCU board has now attended a few meetings and gotten some insight into why the CU makes some of the decisions it does. That's good; but it would also be good for many CU boards around the U.S. to occupy themselves with the kinds of questions posed by the folks in Vermont.
Frank J. Diekmann can be reached at email@example.com.