ARLINGTON, Va. – No matter what side you may be on in the question over some credit unions exchanging their charters to those of mutual banks it is almost certain that your view of the question will be formed by what, in your mind, constitutes the `good of the credit union member.' Credit union boards of directors and CEOs who have led their CUs through the charter change process to become banks on the other side have said, and say, that they have done so for the good of their credit union members. Some of those same members of those credit unions have objected, arguing that becoming a for-profit bank is by definition not in the best interests. Which one is right, and why? Defining what, exactly, the best interests of the credit union member are turns out to be a surprisingly complicated and elusive process. For some credit union advocates it boils down to statistics. Fred Becker, CEO of NAFCU, spoke at the press conference where NAFCU unveiled its policy on charter conversions and spoke movingly about asking credit union audiences about how credit unions have been consistently shown, on average, to offer higher interest on savings products and charge lower interest on loans, along with lower fees. Credit union members, as well, consistently indicate that they are happier with the customer service in their credit unions than bank customers are with their banks and these two things prove, Becker said, that credit unions are better for members than banks and thus have more of the members' best interests at heart. But Richard Garabedian, a partner in the Washington D.C. law firm of Luse Gorman Pomerenk & Schick who has helped credit unions convert their charters in the past, counters with the observations that averages don't speak to the specifics of any given institution. For example, Garabedian pointed out that while, on average, credit unions might beat banks on interest rates, fees and customer service, an individual bank, particularly one which used to be a credit union and which used to have a credit union attitude, might provide very good interest rates, low fees and good service – maybe one that would beat a credit union's. Likewise, as credit unions rely on fee income for a greater part of their revenue streams it may be that the fee structures of the two financial institutions may become more alike than dissimilar. Part of the problem is that there is no one perfect credit union and no one average credit union member, Garabedian said. "Some credit union members may want a better chance to get a business loan," Garabedian said, "while some members might want better rates on consumer loans. Some may want to have more access to getting good mortgages. In terms of product mix, there are more credit unions these days which are structured a lot more like mutual thrifts." Garabedian also pointed out that, at the bottom line, all financial institutions have to treat their customers well if they want to stay in business. In a free market economy, no financial institution – whether bank or credit union – can afford to take their members or customers for granted. Other credit union advocates will point out that credit union members own their credit unions and that holding onto that ownership is in the ultimate best interest of the credit union members. But Garabedian and other charter choice advocates will point out that the ownership rights of a credit union member can only really be exercised in a tangible way if the members liquidate the credit union – a fact that the American Association of Credit Union Leagues acknowledged in its recent report even as it made a case for credit union members being given a stronger understanding of that ownership: "Largely because they cannot withdraw their portion of the net worth at will, members are typically unaware of both the fact that they are the direct owners of the credit union and the magnitude of that ownership," wrote the AACUL Task Force in its report Protecting the Interests of Credit Union Members. Tony Ward-Smith, a noted credit union consultant in Seattle, Washington, argues differently from both approaches, contending that credit unions act in their members' best interests when those interests, in fact, are what motivates the credit union's actions. In his presentation, Where To From Here, Ward-Smith makes the case that in order to work in their members' best interests, credit unions must have those interests at heart. Do credit unions exist to improve their CAMEL rating or compete with banks or build more branches or increase capital or reduce delinquencies? Or does the credit union exist to help convince credit union members to save more, and to give them vehicles to do so, or to solve their credit problems, or to help them make smart moves with their money or to provide value added surface? In Ward-Smith's vision, credit unions have their members' best interests at heart when they help their member achieve their own financial goals – to get ahead financially. It's an attitude which goes further than concern over the products a credit union offers and over whether those products make money, Ward-Smith contends, and moves instead to why the credit union offers those products and the vision the credit union has for its members if they use those products. Ironically, in Ward-Smith's view, by keeping the credit union member's financial interests at the core of its operating philosophy, a credit union is more likely to meet its goals of increased profits and return on assets as well because the more credit union products that a member uses the more support he or she provides the credit union. [email protected]