Representative Matthew Winslow
N.C.
House of Representatives
16
West Jones Street
Raleigh,
N.C. 27601
Matthew.Winslow@ncleg.gov
Ref: H. 410
Short Title: Credit Union
Updates
Dear Representative Winslow,
My
name is Jim Blaine. I am one of your constituents in Granville County. I would
welcome the opportunity, at your earliest convenience, to discuss your future
support of H. 410. Here’s why:
The
bill was filed on behalf of the Carolinas’ Credit Union League (“CCUL”, Dan
Schline, CEO), the trade association for North and South Carolina credit
unions. There are currently 30 active state-chartered credit unions in N.C.
The
final draft of the 9-page bill is the result of a two year struggle by small
credit unions, bankers, social activists, states’ rights advocates, and credit
union members to mitigate the disastrous implications of the original 80+ page
draft proposed by CCUL. The original “model bill” sought to re-regulate state
credit unions in accordance with “federal standards” and to eliminate the long held original principles under which credit
unions were formed in North Carolina – 1) limited membership requirements, 2) a
member-controlled, non-profit cooperative, 3) and a primary focus on serving “individuals
of modest means”.
Although
over 70+ pages of detritus has been removed from CCUL’s original draft, H. 410 retains all
the worst features attacking original credit
union principles:
1.
Proposes unlimited membership for both
individuals and corporations – Even a superficial reader of the changes under 54-109.26 “Membership” defined (b)(1)(2)
[as written] would find it difficult to identify any person on the planet who
would not qualify to join any NC credit union. Consider the phrase… “groups having
a common bond of similar…association or interest.” The translation of that phrase is anybody and
everybody can join.
To add to the assault on the original principle of limited membership 54-109.27 ups the ante by opening membership to any and all
corporations on the planet “…corporations owned and controlled primarily by
eligible individuals, may be admitted to
membership…”. The CCUL, not satisfied with just making individual membership
open to everyone, here proposes to allow membership to corporations, whose
owners don’t even need to belong, just be “eligible”
to join. That would be all businesses
and corporations including companies say in China. That is not where North
Carolinians want their credit union money to go. If you’re unsure of your
constituents’ opinion, just ask them!
2.
Codifies the purposeful erosion of local, member cooperative control: Additionally,
even a not so careful reading of 54-109.31
Meetings of Members will alert you to changes which remove decision-making
authority from the member-owners of a credit union and place key controls in
the hands of a potentially self-selecting, self-perpetuating board of
directors. See (a), (b), (c) for statutory changes which move meeting times and
formats, voting rights, and potential proxy voting rights for corporations into
“bylaw changes” exclusively controlled by an entrenched and then potentially unaccountable board
of directors.
3.
Legislates a shift away from folks of modest
means: H. 410 is fraught with
examples of statutory changes which will permit N.C. based credit unions to
export member deposits and capital out of North Carolina - threatening the
State’s economy, local jobs, and the availability of credit. 54-109.82 Investment of Funds - Do take note of the potential
investment possibilities provided by this bill for N.C. credit unions to lend essentially without limit to members, non-members and
corporations anywhere in the world. The focus on North Carolina and
its citizens is notably absent.
And while you’re at it - given
the recent collapse of two large
banks; take note of the new authority
for N.C. credit unions to invest: 54-109.82 (16) ”In stocks, securities, obligations, or other instruments
that are approved by the Administrator.”
I assume you have been informed that there was substantial credit union
opposition to the original bill draft. Opposition remains, although many credit
unions have agreed to “remain neutral or
voice no objection”, because the watered down version “does not affect their individual interests”. While that may be a
reasonable posture for an individual credit union, your duty and that of the
State Legislature is to the interests of all North
Carolinians.
H.B. 410 does not serve the best interests of North Carolina.
In checking through the N.C. Credit Union Commission, I have been
assured that none of the new provisions
included in H. 410 are important at this time to the continued success, safety,
and soundness of North Carolina’s credit unions. Legislators may also confirm
through Ms. Rose Conner, Administrator of Credit Unions, that no part of H. 410
is vital to the continued sound regulation, nor oversight of N.C. credit
unions.
Many North Carolina credit unions remain highly, and rightfully,
concerned that their future viability as independent credit unions will be
jeopardized if H.410 is passed.
Many of those existing credit unions, which passage of H. 410 will “put
at risk”, are located in rural and economically distressed counties in our
State. The provision in H. 410 (54-109.28)
purporting to assist “underserved populations and communities” is an excellent
example of that old legislative trick of attempting to make an awful bill “look
better” by throwing in an “orphans and
widows” clause. It used to be called
“putting lipstick on a pig!’’ The “pig” in this case is H. 410!
It
appears obvious that the sponsors of H. 410 have – at best – not been given
full and accurate information as to the actual implications of this
legislation. Nor has the Carolinas’ Credit Union League been forthright in
explaining that the underlying intent is to allow North Carolina credit unions
to have unlimited membership, expand and invest outside of North Carolina, and
increasingly limit the local control of North Carolinians of their member-owned
cooperatives. If Mr. Schline and the CCUL believe that these drastic shifts in
credit union laws are needed, then he should plainly say so. And, let the State
Legislature vote those provisions up or down – sleight of hand wording benefits
no one.
H.
410 will literally affect over 5+ million North Carolinians, who are credit
union members. Those North Carolinians deserve the whole truth
and nothing but the truth on the future consequences of H. 410. One
would assume that legislators would appreciate the same courtesy. You should be
told the whole truth and shown “the whole hawg!”
before you are asked to vote.
For
those in the Legislature who are unaware of the rising debate over credit
unions in North Carolina – particularly with State Employees’ Credit Union and
Local Government Federal Credit Union – you might like to follow one side of
the “discussion” at www.secujustasking.com. Or simply
ask your local state employees, teachers, police officers, firefighters,
neighbors, family, and friends.
If new legislation is needed
to clarify the future role of credit unions in North Carolina – H. 410 is not it!
Please
let me know when I might meet with you. Many of the constituents in your
district are credit union members and would appreciate an opportunity to voice
concerns over H. 410. Look forward to meeting with you.
Thank
you.
Sincerely,
Jim
Blaine
...usually not wise to try and fool Mother Nature... or The State Legislature. Both tend to have very long memories...
