WASHINGTON (9/30/08)--The slow legislative progress of a risk-based capital system for credit unions was the final impetus for one group of CEOs to urge dialogue about creating a single national credit union trade association. Kirk Kordeleski, president/CEO of the $3 billion-asset Bethpage FCU in Bethpage, N.Y., and five other CEOs feel so strongly about the issue that they have unveiled a new white paper called, “A Stronger and More Effective Single Trade Association for Credit Unions: The Time is NOW.” “This effort was borne of a small group of credit union folks, frustrated over the lack of movement of the Credit Union Regulatory Improvements Act (CURIA), business services and capital reform,” said Kordeleski in an interview yesterday. Kordeleski said the group believes credit unions would benefit by bringing the National Association of Federal Credit Unions (NAFCU) and the Credit Union National Association (CUNA) together. “Our intent is to encourage meaningful and productive dialogue” toward that goal, he said. In addition to Kordeleski, the other five collaborating credit union CEOs include:
* Nader Moghaddam, Financial Partners CU, Downey, Calif.; $741 million in assets; * Teresa Freeborn, Xceed Financial CU, El Segundo, Calif.; $799 million in assets; * Gordon Dames, Mountain America FCU, West Jordan, Utah; $2.7 billion in assets; * Mary Cunningham, USA FCU, San Diego, Calif.; $692 million in assets; and * John Bommarito, Western FCU, Hawthorne, Calif.; $1.4 billion in assets.
“Ultimately, there were deeply held concerns that the infighting between CUNA and NAFCU didn’t allow for a strong stance on risk-based capital, among other issues,” said Kordeleski. Coordination between CUNA and NAFCU just hasn’t work, he explained. “Even during H.R. 1151, both trades wanted to go their separate ways until we forced them to work together,” said Kordeleski. “That effort was eventually very successful because both trades understood that no amount of petty bickering would be tolerated and there were credit unions reviewing each of the steps taken.” In that case, “one trade association would have been as effective as two,” he said. “And when they don’t work together, particularly on major bills or regulations, we all lose.” Kordeleski explained the quickening pace of credit union consolidation and increased expense of supporting separate trade associations support the concept of one entity. Other credit unions recently have joined Kordeleski’s effort, including 30 aerospace industry credit unions and large credit unions in California and Nevada. “So far, 90 of the largest 300 U.S. credit unions support the white paper in principle,” he said. According to Kordeleski, the biggest challenge so far has been simply getting both groups to the table. He said CUNA, via Board Chairman Tom Dorety, was open to discussions. NAFCU is disinterested, said Kordeleski. In a statement, CUNA’s Dorety said CUNA endorsed the concept of the group and expressed CUNA’s willingness to talk. He added that CUNA believes continuing a “coordinating council” between the two trade groups is insufficient and will not address the valid issues raised by these credit unions. Further, Dorety said in the statement, the initiative by the CEOs is entirely theirs--CUNA has had no hand in the effort. Kordeleski said his group of CEOs is asking right now for the boards of both trade associations to simply sit down and talk about solutions. “We want them to take into serious consideration the white paper’s six core principles and to act in good faith on them,” he said. Kordeleski underscored that his effort was not about CUNA or NAFCU winning or losing, because “each association has many leverage points.” “This is about speaking consistently and capably for credit unions,” he pointed out. Moving forward, Kordeleski said his group of six will meet next week to draft a communication about the white paper to large U.S. credit unions. The CUNA and NAFCU boards also will receive another letter urging a dialogue about the paper’s principles. The white paper will be posted next week on a neutral website. In the meantime, credit unions also can obtain the white paper by emailing Kordeleski at email@example.com.