Pennsylvania CU CEOs Give State Secretary of Banking Crash Course on Philosophical Differences Between CUs, Mutuals

HARRISBURG, Pa. – The topic of conversion at the annual gathering of CEOs of large credit unions in the state turned into what was described as a “spirited discussion” about the CU philosophy when invited guest Pennsylvania Secretary of Banking William Schenck raised the issue of mutual conversions. At a dinner held in conjunction with the Large Credit Union CEO Forum for CEOs, Schenck gave his perspective on the financial services industry in Pennsylvania and where he sees it going. He also talked about some initiatives of the state agency such as a foreclosure study that’s in program and steps addressing mortgage predatory lending. It was during a “free exchange discussion” between leaders of the largest Pennsylvania CUs and Schenck on various issues when the Secretary of Banking asked attendees why they don’t just convert to mutuals? “I don’t think when he posed the question he realized what a hot button issue conversions to mutuals is to credit unions,” said Pennsylvania Credit Union Association SVP of Communications and Marketing Mike Wishnow who worked for Schenck as his press secretary during his first six months in office. “Schenck is always trying to look at things from different perspectives. I’m sure his question was intended to better understand the thinking of credit unions, but he unintentionally struck a nerve,” said Wishnow. “The Secretary’s question I’m sure was intended to be an educational one, not a suggestive one, and an education he certainly got. When he asked the question in an honest manner, he received an equally honest response from the CEOs who were there. The credit union CEOs who were there rose to the occasion and clearly made the distinction to Schenck on the philosophical differenc between credit unions and mutual savings banks.” In fact, attendees explained to Schenck that the concept of mutual conversions is contrary to the credit union philosophy. Instead, they explained that what CUs need to grow and prosper is regulatory relief and access to secondary capital, so credit unions can better serve their members and avoid any need for conversion. While Schenck understood the credit union difference in terms of CUs’ structure, “the philosophy of credit unions was brought to fact,” said Wishnow. The PCUA official added that Schenck has been in his position for a little more than a year and during that time “he has dealt with some credit union issues and has always been extremely fair to credit union. Schenck’s agenda is probably more pro-consumer than any other secretary of banking I can recall, and because of that his agenda coincides with ours.” Also speaking at the event that ran from Sept. 23-24 was former NCUA Chairman Dennis Dollar currently with consulting firm Dollar Associates. He spoke on opportunities and challenges facing CUs and reiterated that they’re tax-exempt and different from other financials because of their structure. -