Things Worth Knowing If Not Lost In Translation
Notes from the road, beginning with the 1 CU Conference in Las Vegas, which was co-sponsored by CUNA and the World Council of Credit Unions, and which hosted 2,800 people from Australia through Zimbabwe.
• Why Vegas in July? We assume because Hell was already booked (by the bankers, one assumes), and a it was a great opportunity to show all those international visitors where those subprime loans went.
• Has the World Cup made inroads in America? At that bastion of Americana, the Harley Davidson Café on the Vegas strip, every TV was tuned to the World Cup final between the Netherlands and Spain. Admittedly, nothing else was on TV that day, but the place roared when Spain scored. (Then again, after 100 minutes of "nil" who wouldn't applaud something?)
• It's a tough crowd, I tell ya, a tough crowd. One of the briefest-ever Vegas stage careers created a little buzz early on at the meeting. Conference hosts brought in California-based comedian Patrick Hannifin to act as emcee of the meeting. But Hannifin put the "one" in the "1 Credit Union Conference" with his one short appearance kicking off the event. Hannifin's first strike was he simply wasn't very funny-and I can only imagine what it was like for the interpreters who were translating his remarks (maybe it was funnier). Strike two was he was gave a strong impression of being completely unprepared, as if the paper from which he was most obviously reading was the first time he had ever seen or heard the words "credit union."
But all that paled to the big whiff that became strike three. Hanifin struggled with several pronunciations for "CUNA," before inexplicably settling on Koo-wauna, including a reference to Koo-wauna's just-retired CEO, Dan Mica, whom he introduced. Mica made a point of stressing the pronunciation of "Cue-na" in his remarks, which drew laughs from the audience.
As Mica was speaking Hannifin was being given the hook backstage and didn't appear again, and on day two Filene Research Executive Director Mark Meyer was pinch-hitting. Wait. Did I say Filene? Perhaps should I say 'Phillee-leen-ay."
• Speaking of Mica, he was presented with one of those oversized checks one sees being presented to prize winners, in this case a check from the Credit Union Roundtable for $222,000 to go toward Credit Union House. Personally, I would have taken that check and headed to the MGM Grand's casino and just walked around and told people, "Put everything you got on black in that roulette wheel; just look at what I won!"
• Statements from regulators north of the border and Down Under led to a little jealousy by U.S. CUs. During a general session discussion of regulatory developments, Brandon Khoo, executive general manager with the Australian Prudential Regulatory Authority, noted that in his country CUs have been able to secure secondary capital since 1992. "The use of secondary capital in Australia has been reasonably well spread, but the amount of dollars has been limited," said Khoo.
In Canada, noted Andy Poprawa, CEO of the Deposit Insurance Corporation of Ontario, most jurisdictions permit Additional Membership Shares, which allows members to buy additional shares, providing capital to the CU, but without changing the one-member, one-vote policy. CUs can also issue subordinated debt. "The question that's always asked is does supplemental capital change the nature or philosophy of the credit union, and are experience has been, not really," said Poprawa. He added, however, there has been some anger expressed in the cases of CUs that sold Additional Membership Shares and then failed, in which case members lose their investments.
As for supplemental capital in the U.S., NCUA Board Member Gigi Hyland said, "we will not be taking this issue up. Nothing is going to happen to it."
• As if it weren't enough dealing with U.S. CUs unhappy over regulatory burdens, the corporates, the assessments, their examiner, etc., a question from a Canadian CU over why regulators were attempting to put CUs "out of business" was also directed at Hyland. She noted that in the case of U.S. CUs, many of the regs with which they must comply and which NCUA enforces are actually issued by other agencies.
• A gentleman from Cameroon rose to ask panelists what could be done about board members who serve too long, sometimes as long as 10 years! You could almost hear U.S. credit unions in the audience thinking, "Sir, we have a name for board members like that in our country-rookies."
But Gigi Hyland responded and even offered up a view she admitted might not be popular in a room full of directors (it's Vegas, after all). "I would posit that the longer you are a board member, the less likely it is that you have fresh eyes." Hyland suggested that many board members who began serving when their CU served a single sponsor have stuck around as the FOM went community, and as members have become younger and perhaps even more Hispanic. Board members, said Hyland, need to ask themselves, "Are you still responsive?"
Canada's Poprawa said that country is putting in place a plan requiring every credit union to have term limits-and not ridiculous limits, like 10 five-year terms.
Frank J. Diekmann is publisher of Credit Union Journal and can be reached at email@example.com.