Credit Union Times - October 1, 2008 - (Page 34) NEWS CUNA-NAFCU MERGER: Six CEOs See Advantage in One Voice for CUs (Continued from page 1) The letter was signed by John Bommarito, CEO of Western Federal Credit Union ($1.4 billion in assets) in Hawthorne, Calif.; Mary Cunningham, president/ CEO of USA Federal Credit Union ($697 million in assets) in San Diego; Gordon Dames, president/CEO of Mountain America Federal Credit Union ($2.7 billion in assets) in West Jordan, Utah; Teresa Freeborn, president/ CEO of Xceed Financial Credit Union ($770 million) in El Segundo, Calif.; Nader Moghaddam, president/CEO Financial Partners Credit Union ($658 million in assets) in Downey, notification to its members about its decision to reject merger talks, “more than 90% of the 30-40 responses we received strongly supported what we did.” Beal said NAFCU’s board is willing to “meet more often” with its CUNA counterpart to better coordinate their lobbying efforts. He also expressed an interest in BEAL reviving the joint coordinating council, made up of board members from both groups, which was established during the campaign for consumer choice. Dorety said CUNA’s board is not opposed to planwhere we don’t look to make changes in economies of scale is the two trade associations.’’ The idea of merging the groups is not a new one. When CUNA President/CEO Dan Mica came to the organization in 1996 he expressed an interest in combining the groups, but NAFCU has long been opposed to the idea. Kordeleski also pointed out that two of the banking industry trade groups–the American Bankers Association and America’s Community Bankers–merged last year and gave that industry a more unified voice. The Independent Community Bankers of America remains intact. DORETy CUNA, which is headquartered in Washington, but houses the bulk of its employees in Madison, Wis., has 273 employees and an annual budget of $56 million. It was founded in 1934. NAFCU, headquartered in Arlington, Va., has 65 employees and an annual budget of $11.5 million. It was founded in 1967. In addition to the logistical questions of merging personnel and deciding which employees from each group would work for the new entity, the boards would have to find a way to reconcile the boards’ disparate approaches to membership. Credit unions join CUNA through their state leagues while credit unions join When we don’t speak with one voice, we don’t get as much of what we want. The two groups sometimes fight each other, rather than fight the bankers. When lawmakers hear competing voices, their tendency is to do the minimum or nothing at all. —Kirk Kordeleski Calif.; and Kirk Kordeleski, president/CEO of Bethpage Federal Credit Union ($2.3 billion in assets) in Bethpage, N.Y. Kordeleski, the group’s spokesman, said in an interview that credit unions could get more of what they want from Congress in key areas like regulatory relief if lawmakers only heard from one credit union group. “When we don’t speak with one voice, we don’t get as much of what we want. The two groups sometimes fight each other, rather than fight the bankers. When lawmakers hear competing voices, their tendency is to do the minimum or nothing at all.” Kordeleski said his group of six CEOs had received support and encouragement from “a range of credit union CEOs” including many in the aerospace field. He noted that on the vast majority of issues affecting credit unions, CUNA and NAFCU are in agreement. According to Kordeleski, the only big issue on which the two groups disagree is share insurance, which NAFCU thinks should only be run by the NCUA and CUNA favors allowing states to decide whether there can be private insurance. On the smaller issues where there are disagreements, the fighting between the two groups diminishes their effectiveness. Dorety said, “We agree conceptually with what they said and we believe we should sit down and discuss it with NAFCU.” Beal, said his group’s “core values involve direct membership, commitment to a federal charter and a commitment to an independent trade association, and we couldn’t reconcile these values with a merger.” He also said that when the board sent an e-mail ning strategy with NAFCU when beneficial but “there has been very little value in the coordinating council.” Kordeleski said his group plans to write another letter to the boards of CUNA and NAFCU requesting another meeting to discuss these issues. If nothing It seems to us that the oppositional stands of each organization to the other is counterproductive and has likely led to instances where decisions are made in order to give one organization a leg up in the battle for credit union support, rather than a logical decision that is in the best interest of credit unions. —CEO Letter comes of that “the next step will be encouraging CEOs about the future…. If no one will listen, you have to vote with your dollars.” Kordeleski said a merger would also represent a cost savings for credit unions such as his, which now feel the need to join both trade associations. He said his credit union pays about $120,000 annually to the Credit Union Association of New York and CUNA and between $40,000 and $45,000 to NAFCU. Cunningham added, “As more of our system consolidates, it makes less sense to have separate lobbying organizations for such a small movement. We are always looking for cost savings but the only area NAFCU directly. Kordeleski said CUNA’s presence in every state through the leagues is one of its greatest strengths because it gives the credit union movement political clout in every state. He noted that when he met with CUNA’s board, some of the league representatives expressed concern about a merger diminishing the strength of the leagues. He also said that NAFCU’s direct membership structure is appealing as well, especially to credit unions that want to bypass state leagues and only join a national organization. —cmarx@cutimes.com MATC CU to Merge with UW CU MADISON, Wis. — MATC Credit Union has announced plans to merge into UW Credit Union. The two credit unions will work together to join institutions and provide current members and the Madison Area Technical College community a full-service branch at the Truax campus. “We are very excited by the opportunities that this merger will bring,” said MATC Credit Union President Rhonda Mork. “We have very similar service philosophies and both have a long history of service to campus communities. This partnership is not only beneficial for current MATC Credit Union members, but an exciting new financial choice for students, faculty and staff.” MATC Credit Union, with $2.9 million in assets and 650 members, will merge into UW Credit Union, a $1 billion credit union servicing more than 118,000 members by December 2008. Both are headquartered in Madison. “MATC students, faculty and employees will benefit from a full-service campus branch,” said UW Credit Union President and CEO Paul Kundert. “In addition to saving, checking and affordable lending solutions, UW Credit Union’s MATC-Truax location will offer the resources of the UW Credit Union’s financial safety net program to help promote good money management skills.” MATC Credit Union staffers have been offered continued employment following the merger, and additional employees will be hired to support expanded hours. “We look forward to increasing our service to the whole MATC community,” said Kundert. “During our 77-year history we have developed considerable expertise in serving campus communities and take pride in our commitment as a campus partner in providing affordable, quality services to campus employees and students.” The merger plans are contingent on the approval of the Wisconsin Department of Financial Institutions’ Office of Credit Unions. Credit Union Times, October 1, 2008 cutimes.com http://www.cutimes.com
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