Already noted for using novel arguments in favor of moving from a credit union to bank charter, the 69,000- member $1.6 billion Technology Credit Union has also introduced a new approach into the question of how member communications in converting credit union should be handled.
NCUA regulations overseeing the charter change process require a credit union considering such a change to facilitate communications from members opposed to the change to the rest of the membership. Two members of Technology Credit Union, Robert Marinace and Carlos Rodriguez, elected to respond to the requirement and sent Technology Credit Union emails to share with other members.
But Rodriguez and Marinace said they were shocked to discover their emails arrived in members' mailboxes with tracking technology, called servlets, that allows the credit union to identify and track members who click on links for further information contained in the email.
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Thus, Marinace and Rodriguez said, a member who clicked on a link to a Facebook page belonging to a charter change opposition group could have both the fact they have done so as well as their identity collected by Technology Credit Union.
Such tracking software allows the sender to collect both the numbers of members that click through to links the software is tracking as well as the email addresses of the recipients who click the link. But analysts familiar with the technology stressed it is impossible to independently discover how much information Technology Credit Union is actually collecting. The credit union has not yet commented on the servlets.
The tracking software has drawn heat because it was included in emails that, its authors contended, was never meant to be a marketing email and the credit union did not write them.
Servlets have been used as a email marketing tool for years, Rodriguez acknowledged, but he maintained that credit unions should notify members of the tracking software and let them opt out. He also argued that the context of these particular emails would have argued against their use.
"Using a tool like this might be somewhat understandable and appropriate for marketing auto loans," Rodriguez said. "But these communications are not about auto loans. If members who reveal an interest in preventing their credit union from becoming a bank later receive additional materials in favor of the conversion, it puts them at a serious disadvantage." He explained that the credit union could target the members who appeared inclined to oppose the conversion proposal and focus resources on getting them to change their minds.
Rodriguez also pointed out that NCUA regulations would appear not to allow servlets to be included in these emails. The relevant part of NCUA's regulations allow a credit union to include a one-paragraph message with their member materials but nothing else, as laid out in 12 CFR section 708a.104 (f) (3).
Rodriguez and Marinace contended that including the servlets in the emails made them more likely to be blocked by members' email programs, which could incorrectly identify them as spam because of the number of servlets.
"If the goal of the regulation was to make sure members at credit unions that are considering converting get to talk to one another about it, those servlets would appear to have thwarted the regulation," he commented. "Why take the time and spend the money to send it?"
The NCUA has not yet commented on whether its regulations would allow the use of servlets and Technology Credit Union has not yet said whether or not it consulted the agency prior to including the tracking software.
Paula Martin, a member of Technology Credit Union for about three years and an executive in the Silicon Valley's computer industry, said she felt incensed that Technology added the tracking software to the emails.
"This wasn't email from the credit union," Martin pointed out. "Yes, the credit union facilitated the sending, but the emails belonged to their authors who paid money to have the credit union send them. It's outrageous that the credit union should have seen fit to add anything at all to these communications."
The use of the tracking software in an email has introduced yet another dimension to an already complicated regulatory situation in large part because the use of such tracking tools in marketing email and websites is controversial.
Technology Credit Union informed members in October 2011 that is was contemplating changing to a bank charter.
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