Washington CU League Cuts Board Size, Cites Declining Number of Credit Unions

FEDERAL WAY, Wash. – Faced with a declining number of credit unions and the prospect that one in nine credit union CEOs could soon be sitting on the board of the Washington Credit Union League, members have voted to reduce the number of board positions from 17 to 10. The vote came Friday (Sept. 12) at the league’s 70th annual business meeting. Under the new bylaws, one person from each of eight geographic districts will be elected to the board. Previously, two people from each district were elected. The plan also calls for two at-large delegates to be elected statewide rather than just one as in the past. The number of board members elected from the geographic districts could be further reduced if the number of statewide credit unions declines in the future. That would be accompanied by a concurrent increase in the number of at-large delegates. The board would never drop below nine members under the adopted change. An election for all of the board seats will be held in May 2004, according to John Annaloro, president and chief executive of the league. “I don’t believe it will have much of a financial impact,” he said. “But streamlined governance is usually a key to having an organization that can react quickly to changes in the financial services marketplace. In that regard, it may be a very good thing.” The change was recommended by a league task force that was created to look into the issue. “The committee looked at all the different ways others have approached the problem and made suggestions that were appropriate for the Washington market,” Annaloro said. Annaloro and board chairman Byron Edgett, president/CEO, Spokane FCU visited credit unions in each district to explain the proposed change prior to the league’s annual business meeting. “I think there was some concern voiced in meetings,” Annaloro said. In the end, member credit unions overwhelmingly approved the change, he said. He noted that the decision by the current board meant that members were giving up their positions. “In many ways it was a hard decision (to give up their positions),” Annaloro said, adding that the option was to run for election “against another board member who they consider a friend and colleague.” “We were aware that this (reduction in board members) meant that some existing board members would no longer serve on the board, but we felt that this was the most appropriate thing to do,” said board member Bob Harvey, president/CEO, Seattle Metropolitan CU, who chaired the task force. In addition to reducing the number of board members, delegates also approved plans to establish a standardized election process. The bylaw change comes as the number of credit unions in the state continues to steadily decline through mergers and other changes. Eight mergers are currently in the works, according to Annaloro and a fourth credit union in the state has announce plans to convert to a mutual savings bank. The number of credit unions – once numbering nearly 400 years in recent years – is expected to fall to about 140 by the end of 2003, Annaloro predicted. Despite the decline, the actual number of credit union members, branches and assets has increased, he noted. “Credit unions are having a tremendous year,” he said. Annaloro said that despite the merger frenzy, small credit unions continued to fare well. “I believe there are many small credit unions doing very well in this marketplace,” he said. “They have new opportunities to differentiate themselves and with electronic delivery options there are advantages that were not there five or 10 years ago for small institutions.” -