McHenry Getting Feedback From N.C. Credit Unions on Controversial Bill

WINSTON-SALEM, N.C. – Congressman Patrick McHenry, the freshman North Carolina Republican representative who has introduced a bill that would curtail some of NCUA’s authority to regulate the process by which credit unions attempt to change their charters to those of mutual banks, has been hearing from CU executives in his home state. In one letter, Jack Braswell Jr, CEO of the $180 million Members Credit Union pointed out that although the credit union is headquartered in Winston-Salem, outside of the congressman’s district, the credit union has 64% of its 51,000 members living in the district McHenry represents. On behalf of his members, Braswell wrote: “It concerns me that although this legislation was offered as pro-consumer and characterized as `not anti-credit union’ on your Web site, North Carolina credit unions were not asked for their input prior to its introduction,” he noted. “Furthermore, based on the feedback I am aware of, your measure has received praise only from those outside the credit union industry (bankers) and from those inside our industry desirous of conversions themselves.” Braswell pointed out that the “heart” of McHenry’s bill, if passed, would serve to significantly hide the reality of what a credit union conversion means. “The fact that the converting credit union would not be required to put ( I would suggest in bold 20 point type face) the fact that the members are relinquishing 100% of the capital of the credit union of which 100% belongs ( and is ultimately payable ) to these same members is a gross distortion of the impact of a conversion,” Braswell asserted. “The Board and management of a credit union are charged with the responsibility of protecting the assets of the credit union and have a primal fiduciary responsibility to the membership and an action like this is tantamount to dereliction of duty. It smacks of corporate raiders,” he added. Braswell praised McHenry for being concerned with the financial well-being of his constituents, but pointed out that credit unions have served his constituents well in improving their financial health. “A recent study conducted by Dr William Jackson at the University of North Carolina helped quantify how much of an impact credit unions have in the lives of North Carolinians,” Braswell explained. “Dr. Jackson’s research found that in 2003 credit union members in North Carolina saved $336 million by using credit unions instead of banks. His work further revealed that non-credit union members in North Carolina (bank customers) saved $60 million because of the presence of credit unions in the marketplace.” Meanwhile, McHenry has also begun to see credit union members at two meetings he has conducted across his district this August. Wearing credit union pins, members of N.C. credit unions have been showing up at the meetings to ask the Congressman about his support for the bill. According to a source familiar with the meetings, McHenry has been surprised by the show of interest in the issue. McHenry appeared a little taken back by the questions and at one meeting “stuttered” for the first time all night when trying to answer, according to reports from the meetings. Rather than address the question directly McHenry focused on the folding issue in the Community Credit Union conversion and provided a quick summary (from his point of view) of where NCUA had strayed as a regulator. -