In Restructuring, Iowa League Cuts Board Size Almost in Half

DES MOINES, Iowa – Reflecting the changing structure of U.S. credit union leagues, the Iowa Credit Union League is cutting nearly in half the number of directors on its board from 21 to 12, dumping a redundant “district” format, and moving to asset size for CU representation on its governing unit. The decision to “downsize” the board and make other changes in League structure, approved two weeks ago at the annual meeting in Dubuque, is designed to streamline decision-making and create a more equitable system for electing members. The restructuring, recommended by a year-old Governance Task Force, also underscores the loss of small CUs across Iowa and problems associated with using League chapters as prime representative bodies. “Some of our chapters are down to four or five members,” noted Gary Peterson, vice chairman of the League and chairman of the Task Force. Peterson, who also is president/CEO of the $63 million Financial Plus CU of West Des Moines, said the new structure to take effect Aug. 1 with election of new directors is in line with what has been done in other state Leagues, in CUNA and among cooperatives, which were studied by the Task Force. Under the new framework, the League will use four asset categories – $0-7 million, $7-20 million; $20-50 million, and over $50 million – with three directors from each category serving three year terms. Previously the League relied on a structure in which overlapping “districts” and chapters elected representatives to the board but that system has become antiquated and lacked equity, League officials explained. The Iowa League, in some measure, is a distinct departure from other Leagues by removing geography from its board formula. “Iowa credit unions felt they had more in common with other credit unions in the state based on asset size rather than being neighbors,” said Justin Hupfer, vice president of government affairs. Peterson, who is slated to move up to League chairman in August, said the need for restructuring follows Iowa’s steady loss of small CUs over the years – a phenomenon endemic to the industry. “I’m a former examiner and I can recall in the 60′s and 70′s when we had 425 credit unions,” said Peterson noting that number has dropped to 170. The problems with representation, he said, surfaced in the chapters and districts as very rural chapters had fewer CUs as members. The new bylaws, which were approved without dissent at the Dubuque convention contain a “moving” schedule on asset ratio allowing the board to ratchet up the categories as CUs grow in size. Peterson said the new Iowa League Board organization is similar to the Missouri Credit Union Association which more than a year ago reduced its size from 22 to 14 with plans to cut that number to 12 in 2005. The Missouri Board structure, however, retains regional representation though chapters are not directly in the mix. Under the Iowa format, the trade group retains its 14 chapters but the district overlay is eliminated. “We have very few credit unions in the western part of the state and we had problems in proportioning them geographically with the rest of Iowa,” said Pat Jury, vice president. “Those folks felt they were better off and had more common with peers on the east side based on assets.” Jury noted also that in producing the new structure, the League did polling and research of both state and national trade groups including Iowa motor carriers, realtors, and the medical society as well as the American Society of Association Executives. “We believe our new framework will strengthen our committees and fine tune the way we govern,” concluded Peterson. -