HILTON HEAD, S.C. – Credit union mergers and the changing nature of the industry's business is triggering a broad new look at league structure and operations with a particular emphasis on "invigorating" the chapter network, described in some locales as "moribund" through loss of member participation. The issue of league operations, in particular, is coming to a head this month in two states-Georgia and Pennsylvania-where noteworthy changes in voting representation and chapter organization are being considered by League memberships. The most current of the proposed changes was slated to come last week here during a special membership meeting of Georgia Credit Union Affiliates to consider a bylaw change reorganizing the governing board of directors to reflect size distinctions "rather than geography." The chapter network in Georgia would remain intact "for education and networking activities," but the role of chapters in directly electing representatives to the board would be diminished by the creation of three new "geographic districts," League officials explained. Meanwhile, in Pennsylvania, a special Chapter Task Force of the Pennsylvania Credit Union League began deliberations Oct. 2 on a possible revamp of the chapter structure in that state following concerns raised last April that the chapter system has become "archaic" and lacked relevance to today's times. "We're just starting our work now, and we're not sure yet whether the chapter system needs a little tweaking or whether it should be totally redone," explained Diana Roberts, chairman of the nine-member Task Force who also is president of the $30 million Hershey Federal Credit Union. Comments made by leaders of the state's 30 chapters at the annual Leadership Conference last April, she said, focused on "what more we might be doing in the chapters." There were some chapter executives, she said, who complained the chapter meetings lacked freshness and new ideas "with the same people coming to the meetings." Other chapter reps questioned "whether what they were doing was pertinent" in today's market. "Should the chapters become lobbying forces and more politically involved?" was one question, Roberts said. Jim McCormack, president of the Pennsylvania League, said the task force is expected to make a preliminary report and possible recommendations for chapter changes at a February meeting. McCormack said a goal of the task force would be to "define the future" of chapters which have been operating the same for years and in some cases shown declining attendance. "The volunteers get together and tell their latest and greatest" achievements which can be valuable, McCormack said, and yet there are some chapters which meet sporadically like "once every two or three months" in sessions which are unproductive. Perhaps, McCormack said, the chapters can be turned into stronger lobbying vehicles to develop grassroots political activism. One problem, he said, is that the League simply "may have too many chapters." To assist the task force, the League has hired a Harrisburg association consultant, Lois Dostelik, to provide input for the report. In Georgia, the League membership is expected to approve a set of "governance options" which would alter the structure of the board of directors and eliminate direct voting representation by the state's 10 chapters. Under the plan, board members would be elected from three newly created "geographic districts" with each district having three seats on the board. The districts would each have the same number of CUs-75. Reflecting the CU decline in the state and consolidations-a trend common throughout the country-the district concept, "establishes a reasonable balance between the characteristics of geography and credit union asset size," said the League. The state currently has 225 CUs, a drop from the 400+ in the 70′s, officials noted. Pat Conn, chairman of the Georgia League and also CEO of the $60 million United 1st Federal CU in St. Mary's, said "mergers, consolidations and liquidations" over the years have created "disproportionate" changes in size and structure of institutions in the chapter system. "For instance, the largest credit union in our Southeast chapter is now a bank," said Conn referring to Atlantic Coast Federal SB, of Waycross, formerly Atlantic Coast Federal Credit Union. It converted to a mutual thrift in November, 2000 and has expanded operations in metro Atlanta as well as Jacksonville, Fla. And another CU, Albany Government Employees Federal Credit Union, became Heritage Bank in July. In a September 6 letter to the League membership outlining the "governance" changes and reviewing the yearlong structure study, Conn noted that many CUs in the state felt that "geography no longer matters as much as credit union size distinctions" and that location "is less important in today's environment of instantaneous communication." Citing the changes in the Atlanta Chapter, he noted that it "was also apparent that politics, market dynamics and cultural distinctions are still significant between metropolitan Atlanta and the rest of the state." The board reorganization proposal reduces the size of the board from 15 to 12 and also sets term limits barring an individual from running in more than four consecutive three-year terms. There would be three at large seats but eligibility to serve in those seats would be limited to CUs with more than $100 million in assets "but all affiliated CUs would have a vote in the outcome of those elections." The reorganization package, slated to become effective in May 2002, will be voted on by the membership during the League's annual Fall Institute held at the Hilton Head resort. In his letter, Conn noted if the proposals are adopted, "existing League directors understand they may be legislating themselves out of a job" under the districting format. Susan Newton, senior vice president of league relations at CUNA and executive director of the American Association of Credit Union Leagues (AACUL) said in Washington that while structure issues are taken up periodically by individual leagues the concern over "invigorating" chapters is a recurring one. It is also one that CUNA has been working on for some time. "This is a common issue across the board as Leagues try to come up with new ways to make them work better," said Newton.