Friday, February 6, 2015

Maine CUs Disingenuous "Own It" Campaign

The Maine Credit Union League has launched a disingenuous “own it” awareness campaign.

The campaign focuses on stories of various credit union members.

For example, one story is about a credit union member talking about the benefits of of mobile banking and remote deposit capture and another story is about a business owner, whose business is open late and being able to run to his or her credit union's ATM at any time.

However, these stories are not unique to credit unions. I can go to my bank's ATM any day or night.

Moreover, these stories have nothing to do with owning their credit union.

Outside of having the right to vote and a claim to the residual, if the credit union voluntarily dissolves (which is very rare), what do credit union members really own?

As I pointed out in a September 2009 posting, they own very little.


  1. Let's see... members have voting rights, the ability to participate in the governance of the credit union and liquidation rights, but they own very little (at least you conceded that they own something). Yet, a few weeks ago you posted your concern that, "activist depositors can use the associational membership loophole to potentially gain access to this undistributed retained earnings."

    Which one is it Keith? Access to undistributed retained earnings sounds like ownership to me.

  2. They own nothing and that's exactly how they treat it, as a customer not an owner.
    If credit unions spent as much time and money in the past 90 years of existence "selling" the concept of ownership to members instead of arguing amongst themselves, congress and banks thru the money trap lobbyists of Cuna and Nafcu...they MIGHT I say MIGHT have convinced more than 6% of us deposits to "join".
    As "bad" as big banks are they still have about 70%.
    THATS what has you really angry....90 years of false premise.
    Rock on.

    1. To the contrary, you're the one who seems rather angry. You're childish rants and inability to convey your thoughts without bringing CUNA into the conversation are laughable at best, but seldom do you have any substance to add to the conversation. I couldn’t care less what market share the banking industry has, nor have I ever said banks are bad, I merely like to point out that credit union members do in fact have ownership of their credit union. However, I’ve come to realize that it doesn’t matter how many facts I present you with; you’re merely going to cite your same old talking points rather than refute, with facts, anything I’ve said. Do members have liquidation rights? (YES) Do members have voting rights? (YES) Please note, I didn’t ask if they choose to exercise those rights, but whether or not they have them. Are credit unions required to have an annual meeting and provide notification to the membership? (YES) Do all members have a right to attend? (YES) Are the Board of Directors comprised of members? (YES) Are the Supervisory Committees comprised of members? (YES) I can go on, but to what point? Instead, I’ll encourage you to familiarize yourself with the Federal Credit Union Act, as well as your credit union bylaws. As I’ve stated in the past, the fact that you and your credit union choose not to engage your members or educate them on their ownership rights, does not mean they don’t have those rights, but merely demonstrates a dereliction of your responsibility to your members.

    2. A dereliction shared by all other credit unions except yours.

    3. Come on face the facts. When you say you are an owner you want to have something that you can own like shares of something or anything of value that you can cash in. NOT some make believe things you have mentioned. It is misleading consumers to say they own something. A better way to put it would be as a member you have the opportunity to share in the liquidation of the credit union if that ever happens.

    4. Please, there are various forms of ownership depending on the type of business entity. Lest you forgot, a credit union is a COOPERATIVE. Please take the time to educate yourself on the differences between the various business structures that legally exist, as well as the corresponding IRS rules and regulations that apply. In the meantime I’ll be happy to refute some of your facts (assertions?).

      1. “When you say you are an owner you want to have something that you can own like shares of something or anything of value that you can cash in.” **FALSE** The value of ownership in a cooperative isn’t necessarily monetary or in the form of redeemable shares, but rather a bit more intrinsic: tax advantages, cost savings, perpetual existence, the products and/or services provided, etc. In addition, the owners get voting rights, liquidation rights, etc. Case in point, a homeowner association is owned by the home owners, but I’m not aware of them owning any shares or having anything of value they can cash in. Do they not own the HOA? Of course they do.

      2. “A better way to put it would be as a member you have the opportunity to share in the liquidation of the credit union if that ever happens.” I’m curious, if my wife and I sell our home, do we have the opportunity to share in any equity from the sale, or the RIGHT to collect what is legally and rightfully ours? If members voluntarily choose to liquidate their credit union, they have a RIGHT to any remaining equity, not an opportunity. Hence the term, liquidation RIGHTS not liquidation opportunity. These are same RIGHTS recognized and referenced by Keith in one of his earlier posts.

      If a credit union, or any incorporated cooperative fails to adhere to their bylaws, circumvents the rights of their members or fails to act in accordance with the rules governing that cooperative entity, then the elected officials should be removed and the situation remedied. This is why I say that the board has an OBLIGATION to engage their members, encourage their participation and educate them on their rights, and boards that fail to do so demonstrate a dereliction of their responsibility to their members. Nobody can force the members to vote, attend annual meetings, run for a board position or actively participate in the governance of their credit union, but they should at the very least be made aware of their rights and encouraged to do so.

    5. You are missing the point. The way it is sold to a member is that they are owners of the credit union giving the impression that they own something tangible. There is no explanation such as you provided. By the way, a financial institution is greatly different from a HOA. You can spin it all day long and you come up with the member NOT owning anything of value.

    6. I’ve spun nothing. I’ve provided facts demonstrating that members have ownership in their credit union, and have yet to be presented with anything factual demonstrating otherwise. In the meantime, you’ve provided conjecture regarding members’ perception of what that ownership is, but nothing beyond that. By the way, thanks for letting me know that an HOA isn’t the same as a financial institution, even though that was never said or implied. It’s unfortunate you were unable to see the correlation between the erroneous assumption of what is required to have ownership in something and the HOA example I gave to refute that. As I mentioned earlier, you may want to take some time to educate yourself on the differences between the various business structures that legally exist. In the meantime, I’ll continue to encourage credit unions to engage their members and educate them on their rights and the benefits of their credit union ownership, while you continue to keep your members in the dark, denying them the opportunity to make an informed decision regarding whether or not they own anything of value. Spin it all you want, but based on the cooperative structure of credit unions, they are in fact owned by their members.

    7. Yes, CUs are owned by their members. It's a distinction without meaning.
      All your encouraging has resulted in customers not caring about their ownership. It's a loan and a deposit. They don't care.
      These are facts borne from 90 years of not moving the needle on market share.
      They don't run for the board.
      They don't vote for the board.
      They don't get "their" capital when they close the account.
      They don't hold the board accountable except and unless the value isn't there, then they bank at another cu or bank, just as a bank customer does.
      They don't invest in the cu they join.
      Your well written prose and staunch defense of the meaning of ownership are both admirable.
      You're wasting them on something that not even credit unions care about any more.
      Tax exemption? Yes love that.
      The fact is without meaning.
      When you go by the numbers, years, participation and equity takeout.
      When a member passes away, do the heirs get the $35 and the share of equity?
      Did they have anything at risk?
      And would anyone "join" or "invest" if they knew there was responsibility?



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