Should CUNA and NAFCU merge? Would credit unions be better represented in Washington by a CUNAFCU or a NAFCUNA?
Credit union veterans know the argument has been around almost from the day NAFCU was founded by a group of credit unions meeting in a Los Angeles restaurant in 1967. Ever since, the idea has been discussed, sometimes seriously, and then faded away like the annual meeting speaker.
The trade group merger talk almost always resurfaces when there's a crisis in the capital, such as the recent hubbub surrounding a "bailout" of banks, brokerages, the secondary market and pretty much anyone in the business of buying and selling dollars. (Worth noting, the payday lending industry has not asked for a handout, perhaps because it's had its hand "in" for so long.) Prior to that there was semi-serious talk of such a credit union combo in 1997-98, when CUNA and NAFCU initially responded separately to bank-filed lawsuits and resulting losses in court before coming together for the Credit Union Campaign for Consumer Choice. (Ironically, it's "choice" that's behind separate trade groups.)
Another driver has helped fuel the debate over whether credit unions should be represented by one voice in their lobbying efforts before Congress, and that is the shrinking number of credit unions. When there was nearly 24,000 CUs in the country, there were plenty of dues-payers to fund a league in every state (in some cases, more than one!), along with the two groups in DC (for much of its life CUNA was really a Madison, Wis.-based trade group with a small office in the capital. Now it's a Washington-based group with a backoffice in Madison.) There are now about 8,000 credit unions, and according to the group of six CEOs pushing for trade group consolidation (see the story on page 1 for details), those two dues checks, when added to the need to speak with one voice in order to get much-needed legislation through Congress, mean it's time for serious talk of uniting.
The CEOs have published a white paper titled "A Stronger More Effective Single Trade Association for Credit Unions." Approximately eight seconds after publication the strong rumor was that CUNA, and specifically its CEO Dan Mica, was behind it. That netted an "Absolutely not!" when CUNA Chairman Tom Dorety was asked about that, and sources indicated Mica, who supports such a merger, was not involved, either. Reportedly, the latest effort came out of a roundtable meeting of larger CUs earlier this year at which NAFCU President Fred Becker was present. (NAFCU's board voted unanimously in June against any merger with CUNA.)
Not Building A 'Kingdom'
The folks I talked to indicated Mica has kept his distance from any such plan, as some have suggested in the past the CUNA president is attempting to build a "kingdom." One person passed along that Mica has said privately that while he believes such a merger is best for credit unions, he would be willing to be part of an agreement that delayed such a merger until after his retirement (and no, that's not an indicator he has set a retirement date).
Perhaps the most interesting question of all to mull over is what would happen after such a merger. In Credit Union Land, all the people are not happy all the time, and surely someone would form a new group almost right away. CUAUCU (Curmudgeons United Against Unity CUs) anyone?
* You've seen all the research when it comes to credit unions. What do non-members think? What do members think? What do ex-members think? But one large, influential constituency has seldom been asked what it thinks-credit union employees-until now.
The Filene Research Institute has unveiled some pretty interesting insights from the rank-and-file in a new paper titled ""Employee Perceptions of Credit Unions: Implications for Member Profitability," Authored by anthropologists John B. Gatewood of Lehigh University, and John W. Lowe of Cultural Analysis Group, the study hypothesizes that credit union success is critically dependent on the credit union's employees and, in turn, is likely to be strongly colored by employee perceptions of credit unions, according to Filene.
Setting aside for a moment what is suggested by the fact anthropologists are now studying credit unions, the research speaks to a subject frequently raised in this space: the complete lack of knowledge staff have about the place that puts the pay in paycheck. Among the findings, "Employees can't neatly compartmentalize how a credit union fits into our society," "Employees agree on the 'credit union idea,' but have a very difficult time explaining that idea to external parties," and "Employees can identify the parts of the credit union puzzle, but they don't see how it all fits together."
If a teller or new accounts rep or marketing exec doesn't understand what a credit union is, how will they ever explain it to a member or prospect? If the employee doesn't understand how a CU operates, why would they ever buy in to your plan? You know the pieces; help folks to assemble that puzzle.
Frank J. Diekmann can be reached at fdiekmann
