Many are bored to tears or frustrated by politics, but those can't be ignored either. Republicans are trying to demonstrate their strength by threatening not to raise the debt ceiling. In truth they really don't have much power, especially given the splintered views within the party. And the Dems don't have to give up because 1) the Republicans will kill the global economy by not permitting an increase or 2) Republicans will allow the increase and the Democrats will be able to go into a presidential election year saying, “See what we were able to do.” The Chicago Tribune reported that Senate Minority Leaders Mitch McConnell has a well-balanced proposal allowing gradual increases in the debt limit that Congress could halt with a “measure of disapproval” that President Obama could then veto. Crisis averted. GOP face saved.

Even closer to home for CUs, the tax exemption could get tangled in what the administration has termed “tax expenditures.” In the end, the credit union tax exemption is a lost revenue opportunity to help Uncle Sam pay back all its debts. CUs cannot take a threat to the tax exemption lightly, though as I've written beforeit should not be a sacred cow. CUs must defend the tax exemption with all their might unless there are greater benefits to reap by gaining capital reform or business lending. Don't listen to your hearts; do the math and see what the best business decision is for your members.

How to Screw Up Federal Agencies

The CUs and other regulated financial institutions have argued from day one that they didn't need a Consumer Financial Protection Bureau because their primary regulator already handled that. Lawmakers insisted that the CFPB would ensure consumer protection across all financials, including the fringe providers like payday lenders. Now, with no official leader of the regulatory body, politicians have rubbed salt in the wound since as of this print deadline, only the less scrupulous lenders cannot be reined in despite seeking public comment on how to do just that.

The NCUA is another agency with an unfathomable structure at the top. I requested an interview with all three board members together and I was denied. I wasn't denied because the board didn't want to but because a meeting of the majority of the members of the board constitutes a board meeting requiring public notice and all the bureaucratic trimmings. It's time to increase the size of the board.

How to Jump the Gun Without Shooting Yourself in the Foot

A provision streamlining the CU to bank conversion process became law in Wisconsin. State League President/CEO Brett Thompson said in a statement that the change would “subvert the interests of a credit union's full membership to that of a few who intend to own and profit.” According to the league, the law required “little meaningful notice” of a pending conversion vote, no protections of members' voting rights or equity.

The legislation, in fact, does include three notices be sent to members and that members could vote either in person at the conversion-vote meeting or by mail prior to that meeting date. The legislation isn't very detailed though, and that's a good thing because it's always more difficult to change law than regulations. Regulation to implement the legislation is intended to be more detailed. This is where the league must concentrate its efforts regarding member education in the bank-conversion process.

How to Run a Credit Union Using the Ignorance Is Bliss Method

The Credit Union Leadership Forum recently conducted a survey of senior credit union executives and board members. We asked, “How would you rank your board effectiveness in carrying out their responsibilities?”' Nearly half said the board was somewhat effective (36%) or not effective (6%); 58% responded very effective. Interestingly, only 23% performed annual board evaluations. Further only 12% performed evaluations on individual board members.

During a recent web seminar held by our Leadership Forum, the attendees were polled on the effectiveness of their board's culture. While 55% responded they held challenging discussions on the right issues with the right tone, another 31% said they could be more effective in strategic and succession planning discussions. A full 25% responded that they wished the board could be more engaged strategically. And while most indicated the board does discuss technology at the strategic level, 11% said they never do.

Education is the only way credit union executives and boards can keep up in the modern financial services marketplace.