WASHINGTON — The CUNA board on Thursday voted to present the trade association's membership with a "major revision" of CUNA's bylaws that includes membership choice — a provision many CUs have demanded in recent weeks.

Fifteen months ago, CUNA created a System Structure and Governance Task Force that ended up recommending (among other action items) credit unions be given the choice to belong either to their state league or the national association — which went against decades of precedent.

In September 2015, CUNA's board of directors voted against the Task Force's recommendation for membership choice, prompting a backlash.

Over the past few months the CU community has been divided by the issue. Some leagues (Michigan, New York, Ohio and the Carolinas League) voted to allow direct membership without joining CUNA; while others (the Mountain West CU Association, representing Colorado, Wyoming and Arizona, along with Wisconsin and Utah) issued formal statements supporting the requirement that CUs maintain dual membership.

As CUNA's board wrapped up its two-day meeting Thursday, the trade association released a statement acknowledging it needed to adapt to the new reality, while trying to appeal to its members to recognize the need to stick together for the sake of advocacy.

"The board's vote today shows recognition to the fact that new market forces and increasing expectations demand more direct accountability between credit unions and CUNA," said CUNA's President and CEO Jim Nussle. "That interdependence stands for a united system that is the best advocate for credit unions, not mandated linked membership. That change is all around us, and CUNA is going to be part of it. Ultimately, I aim to position CUNA and our system for a stronger, interdependent and united future by delivering greater value, accountability and advocacy success."

CUNA said its board will begin the process of drafting new bylaws, which are expected to be presented to the membership in early 2016.

Almost lost among the headline announcement regarding optionality, CUNA said 2016 dues would be lowered.

The trade released a letter to all CUs from Susan Streifel, chairwoman of the board of directors. Streifel said in part, "While the board strongly believes in an interdependence model — one in which CUNA is working in concert with our League partners on behalf of credit unions — we also believe that the time is now for CUNA to change and modernize its bylaws in response to the evolving needs and demands of our credit union members. A key component of that change will be to institute bylaws that accommodate membership optionality, or choice, while also strengthening the ability of CUNA and the Leagues to work together as credit unions' strongest advocates."

See Chairwoman Streifel's full letter below:

As Chairwoman of Credit Union National Association (CUNA), I'd like to report on a significant meeting of the CUNA board of directors that concluded earlier today. In addition to approving a 2016 budget and reviewing CUNA's 2015 advocacy accomplishments, the board voted to present the membership with a major revision of CUNA's bylaws that would modernize our structure to enable us to best serve the needs of our credit union members.

The board's action regarding CUNA's bylaws reflects a changing marketplace in which Leagues and credit unions are moving in various ways regarding membership optionality. As a member-driven organization, CUNA must adapt and evolve to accommodate this changing marketplace.

The 2016 budget provides funding for CUNA to execute on an aggressive advocacy agenda, and also includes a dues reduction for member credit unions. Next year, credit unions will pay on average almost 7% less than they would have under the current formula, and total CUNA dues receipts will be less than in 2015.

The major advocacy accomplishments spearheaded by CUNA and the Leagues over the last year include a vastly improved final RBC rule; favorable MBL and field of membership proposals from NCUA; enactment into law of long-sought legislation easing privacy notice requirements, chipping away at the CFPB's Qualified Mortgage rule; and allowing privately insured credit unions access to Federal Home Loan Banks.

It is the proposed bylaws changes, however, that I would like to highlight as they are absolutely critical to CUNA's future.

While the board strongly believes in an interdependence model — one in which CUNA is working in concert with our League partners on behalf of credit unions — we also believe that the time is now for CUNA to change and modernize its bylaws in response to the evolving needs and demands of our credit union members. A key component of that change will be to institute bylaws that accommodate membership optionality, or choice, while also strengthening the ability of CUNA and the Leagues to work together as credit unions' strongest advocates.

The proposed revisions would focus on major principles and would leave operating details to board policy — all while streamlining and clarifying this important document.

The major principles of the proposed new bylaws would include:

  • CUNA is committed to interdependence with state credit union Leagues. 
  • Voting membership available to all natural person credit unions and Leagues.
  • Non-voting membership available to a wide variety of individuals and organizations that support the credit union system.
  • Dues structure to be set by the board, with the intention of reducing the rates in the future as credit union assets grow.
  • Flexibility to reduce the size of the board, expected to remain at 24 for the foreseeable future.
  • Four classes of CUNA directors, with three representing credit unions based on size and one for leagues. Elections for directors from smaller credit unions likely to be within districts, and nationwide for larger credit unions and leagues.

To be clear: Modernizing our bylaws and, as part of that, our membership structure, does not mean that our principles have changed. In fact, quite the opposite is true. An interdependent system in which CUNA and the Leagues work together — strategically and forward-looking — remains unmatched.

If approved by member credit unions, the new bylaws would give the board the authority to implement changes in order to be more nimble and effective in serving credit union interests.

I have tasked CUNA's Corporate Governance Committee with drafting these new bylaws. After the board approves them, please be on the lookout early in 2016 for complete information on the new bylaws and your opportunity to vote on them.

Please reply to this message if you have any questions or comments.

Susan Streifel

Chairwoman

CUNA Board of Directors

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