CUAO Chairman: Long Term Benefits of Consolidation of Oregon, Washington Leagues Outweigh Short Term Sacrifices

BEAVERTON, Ore. – It’s still up to the respective boards of the Credit Union Association of Oregon and the Washington Credit Union League to decide if they want to put a motion concerning the consolidation of the two groups to a vote of their affiliated credit unions, but the chairman of the CUAO says the benefits outweigh the disadvantages and is pushing for the consolidation. “We’re ready to take this to our boards,” says CUAO Chairman Paul Williams, president/CEO, Clakamas FCU, Oregon City. “It’s the consensus of the task force that we move forward and make a recommendation for consolidation.” “Although consolidation will mean some loss of control, all of us are trying to look down the road long term, and we see the tremendous economic benefits that can come out of a consolidation,” Williams adds. The joint 10-member task force representing Washington and Oregon credit unions convened for an all day meeting on April 8 to put together a white paper that evaluates the advantages and downsides of consolidating the WCUL and CUAO. Among the upsides to a consolidation, says Williams is having a larger staff “which will enable us to realize more programs and use mass marketing to focus on the entire region.” Consolidation will also give credit unions in both states the opportunity to have a permanent presence in their state capitals, he adds, by having two Credit Union Houses – one each in Olympia and Salem. “In Oregon, we have a physical presence at the association’s headquarters, but Beaverton is located over an hour away from the capital. Now we’re in Salem when the legislature is in session, but with a Credit Union House there we’ll be able to have a permanent presence and greater representation, as well as host receptions and meetings with legislators,” Williams says. The CUAO Chairman is well aware of the downsides of a consolidation, such as some loss of local control. Williams says outlying credit unions and small ones might feel detached from a larger organization. In addition, he points out, a lot of the staff at CUAO have been there for a long time. Among the many CUAO long-time employees is its president/CEO Gene Poitras who’s been with CUAO for 15 years. If the consolidation is approved, Williams says Poitras is not looking at retiring. Instead “we’re looking at him stepping aside to have an important role and work in an advisory capacity.” But Williams stresses that the task force doesn’t see a lot of downsides to a consolidation. “Some credit unions are questioning why consolidate two organizations that are healthy. But when you look long term, the trade association will have a difficult time staying healthy because of the declining number of credit unions. Both the Washington League and the Credit Union Association of Oregon are financially strong now, but that won’t be the case five years from now. As board members, we’d have to raise dues and cut programs and we wouldn’t be able to sustain staff levels. We could remain strong financially without consolidation, but we’d have to make tremendous sacrifices. “With consolidation, we’ll have to make fewer sacrifices, but we think we’ll be a strong organization with fewer cuts.” WCUL President/’CEO John Annaloro has previously said that the two groups have been talking about possibly consolidating for more than 20 years, and he’s stressed that even with the current on-going discussions, “nothing’s a done deal.” But according to Williams, “The diminishing number of credit unions is pushing the envelope now. The increasing number of credit unions dropping by the wayside puts pressure on dues which in turn put pressure on trade associations to come up with the numbers for meaningful programs. “In the current scenario, as a single organization, we’ll have to keep raising dues to keep up with the loss of credit unions. Consolidation is a way for us to retain staff, and expand services and programs,” says Williams, adding that regardless if the consolidation goes through or not, “we’ll have to change our dues structure because it hasn’t kept pact with the diminishing number of credit unions.” The dues structure that’s in place at CUAO was last modified five years ago, but Williams says that modification didn’t take into consideration the huge drop in the number of credit unions in Oregon. It also doesn’t allow for growth, he says. Williams emphasizes that, “All of us are trying to look down the road, long term and are focusing on the tremendous economic benefits that can come out of a consolidation.” The task force had its final meeting May 17 to make sure it had all its materials and projections in place. Recommendations for consolidation will be presented to the Washington League’s Board on May 21 and to the CUAO’s Board on May 25. Poitras and Annaloro will meet with both boards. “The task force is going forward with recommendations that support a consolidation and that it’s in both organization’s best interests,” he said. “It’s still up to each board to accept the task force’s recommendation to consolidate,” says Williams, adding that, “there are concerns about how credit unions will react because it’s not overwhelmingly obvious that a consolidation is necessary. Nothing jumps out that says we have to do this. The difficult part is looking down the road, and in my case decide if Oregon credit unions would be better off with a consolidation. I believe it’s the best thing to do.” If the CUAO Board recommends a consolidation, Williams said the association will then hold a series of town hall style meetings throughout the state to present information to credit unions and show them figures and the reasons why a consolidation is necessary. “We want them to know it’s a good long term solution,” he said. Another recommendation will be for the consolidated organization’s new board to have all the authority; the task force would only make recommendations. The new board will include 20 members – 10 each from Oregon and Washington credit unions. That number will gradually be brought down over five years to a total of 10 board members – five from CUs in each state – with two directors being dropped each year. “The Credit Union Association of Oregon’s Board is now 15, and we’ll be cutting it down to 10 directors at our annual meeting in October. It would be a huge shock to decrease it to five immediately. The Washington League’s Board is now 16, but it will also be going down to 10,” says Williams. Also at the CUAO’s 2004 annual meeting, the election of board directors will change over to being based on congressional districts. They’re currently based on by CUAO chapters. As for the site of the consolidated Oregon/Washington organization, Williams says “it makes sense” to have something located in the Portland, Ore./Vancouver, Wash. adjacent community area, and the task force plans to recommend that it be “good central headquarters.” In addition, Williams said there has been no formal discussion of a possible name for the consolidated organization, “but Northwest Credit Union League would sit well.” The task force also didn’t discuss the impact of a consolidation between the WCUL and CUAO on the Credit Union Association of the West, “but from a realistic standpoint I don’t see where there would be as much need for that organization,” says Williams. He added that “CUAW covered such a large geographic area, it was difficult to make I work.” Williams didn’t rule out the possibility of other leagues joining the consolidated organization “down the road,” explaining that “at this point we share a common geography and economic area. The task force didn’t examine this possibility closely, but it’s an opportunity for other leagues to consider. We’d be open to anyone who was interested in looking at our model, but we want to make the consolidation between Washington and Oregon work first.” “There’s always a fear of change,” says Williams. “Any time you have a regional organization there will be some people who are afraid they won’t have as much control. In response to existing employees’ concerns, we’re going to do our best to take care of everyone and we’re going to make sure credit unions aren’t overlooked.” -