Credit unions love to talk about how their members are owners.
But the reality is that most credit unions don't act as if their members own the institution.
If they did, then a credit union would disclose to its members a material event that affects the operation of a credit union.
For example, when is the last time you read about a credit union disclosing a regulatory enforcement action that it entered into with its regulator.
If credit union members are owners, they should be notified about events that could adversely impact their ownership interest. They should not be kept in the dark.
At a minimum, credit unions with at least 2,000 member-owners should be subject to the same transparency requirements as publicly-owned companies.
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They keep BODs and staff and members in the dark about CUSO activities as well.
ReplyDeleteTrades and trade papers like to point fingers at others' issues of transparency and integrity but this movement of our's would suffer a death blow with transparency and that day might be coming!
ReplyDeleteCorp cu losses and the "supervision and cronyism that led to it.
The coverup.
The millions spent sending "volunteers" to junkets that produce no material advantage to the members.
And that's just the beginning.
Look for our movement's actions to get exposed and how the screen door on the submarine (Cuna) deals with it. There may not be enough time for a horde of "white papers" to save them!
Just a question? Do banks disclose similar actions/documents to all of their shareholders? Even those owned within a corporate tax free Subchapter S corporation?
ReplyDeleteDear Anonymous:
ReplyDeleteThat is why I gave the caveat of 2,000 members. That would be equivalent to the 2,000 shareholder rule.
For banks, only the more serious regulary actions are publicly disclosed - by the regulator. Memorandums of understanding and lesser regulatory actions are kept confidential by the regulator (FDIC or OCC), and there is no requirement for a publicly traded bank to disclose them to its shareholders (unless it is trying to get more capital through a public or private secondary offering).
ReplyDeleteCome on now, those credit union board of director cruise conferences do have an educational value. so while in port maybe they might be doing some time not reading credit union material. And so they might spend more time at the midnight buffet and the shows but somewhere they might pick up 5 or 10 minutes worth of credit union continuing education.
ReplyDeleteIf the Credit Union were to disclose those actions they would be in violation of the regulations. The enforcement actions are confidential. Come on Kieth you know that. Same as a bank.
ReplyDeleteEnforcement actions are not confidential. Bank regulators publish these enforcement actions. Publicly traded banks will regular file an 8K stating that the are subject to a regulatory action. Same thing happens when banks make significant changes in loss provisionings.
ReplyDeleteIt is exam reports that are confidential.