The Secret, The Not So Secret, The Big And The Not So Big

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They may be secretive, but at least they're consistent.

The group that has filed suit against NCUA to challenge the agency's proposed new rules on conversions to a mutual savings bank charter says it has a lot of credit unions behind it. When it comes to identifying who those credit unions are, however, the Coalition for CU Charter Options is less forthcoming. Being forthcoming and forthright with the Fourth Estate or anyone else who might hold forth on the charter conversion process has never been a plank in the charter converter's platform, so this latest development comes as little surprise.

The "Coalition" is made up of at least one ex-credit union, the former AGE FCU, and it has retained ex-CU trade association exec Marvin Umholtz as a spokesperson. It has consistently criticized the credit union charter and called for making the conversion to a bank charter even easier. It has criticized every attempt by anyone within CUs to shine a light on the conversion process, whether it be the regulations or the very disclosures provided to members.

The Coalition says it is made up not just of former CUs-turned-banks and bankers themselves, but of credit unions that want to see no more impediments to pursuing a bank charter should they choose to do so. Presumably, those credit unions are paying some sort of dues to underwrite the Coalition; if true, those CUs should divulge those payments to the members whose money was used. But who those credit unions are is apparently a case for the folks at "CSI"-the Coalition declines to identify who the credit unions are, including in its recent court documents. Like a lot of things, such as conversions themselves, it says there's no need to ask further questions, we should just take their word for it.

"I can't tell you who the credit unions are. There are many credit unions who are members of the coalition, and many credit unions who have contributed to the Coalition," said Lee Bettis, CEO of the former AGE FCU, which is now a thrift. "I can assure you, there are many, many credit unions."

I'm sure you join me in feeling assured.

* Credit unions are fond of talking about how members are fond of them, even though any number of analysts say that no financial institution can ever really hope for more than a superficial relationship with customers/members. Apparently, if you want to really elicit an emotional response to a financial institution, all you really have to do is mention two small words, "bank fees," as I learned recently during a conversation in the Salt Lake City airport. When I told someone recently that I was a reporter who covered credit unions, they responded, as folks often do, by asking more about just what credit unions are. In mid-explanation I happened to be citing lower fees, on average, at credit unions, when I was interrupted and my fellow traveler became apoplectic. Apparently, as best I could tell through the phlegm and flailing, this person's bank-National City Bank-had transferred three cents between two of his accounts, and then charged him $15 for doing so. Tip to National City: I would not suggest contacting this person and asking for a testimonial.

* Had another conversation recently with someone pretty knowledgeable about credit unions and who has something of a big-picture perspective who suggested credit unions in the U.S., which were imported here from Canada, need to once again look north for guidance. In particular, this person believes Yankee CUs would benefit enormously by borrowing from Quebec's Desjardins movement, in which most of the back-office functions are centralized and the credit unions themselves are storefronts, similar to the "franchise" model advocated in a recent Filene Research Institute paper. While some of you may say that's what CUSOs already do in many instances, this analyst says it's time to skip right over the CUSO step and go straight to a nationwide back-office operation-for everything. "I think a Desjardins approach would add 100 to 150 BPs to (U.S.) CUs," this person said.

* A CEO at a credit union in the West shared this story with me: a criminal gang hit his credit union with a robbery so well-organized that one member of the gang even held a stopwatch. Intentionally seeking to raise the fright level, one of the robbers jumped the counter and put a gun to the head of a teller who happened to also be pregnant. The robbers were quickly out the door, and not long after them so were many of the branch staff. Within 60 days eight of the nine employees who were in the branch at the time of the robbery had quit. And who was the one who remained? The pregnant employee, who was an immigrant to the U.S. and said she would not be pushed around.

* At several recent conference trade shows and in coverage in this newspaper it has been apparent there is significant interest in POS debit as the next growth frontier, the so-called micropayments. But I saw this handwritten sign placed prominently on the counter of a neighborhood market in Atlanta recently: "We ask (beg!) you to please not use your debit card on purchases of less than $5."

* In Chattanooga I recently came across the International Towing Hall of Fame. My life is now complete.

Frank J. Diekmann is Publisher of the Credit Union Journal and can be reached at fdiekmann

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