Blaine said he also has issues with the CUNA board structure that includes representatives from only six leagues, but there are 40 leagues in the nation. That should prompt some cooperative concerns, he said.

“Why should a quarter of CUNA's 24 seats be allotted to six leagues out of a pool of 40 state leagues? And who do the leagues represent as they consolidate?” he said.

When SECU was presented with the consolidation of the North Carolina and South Carolina leagues, he said it made sense from the standpoint that it would save costs. But what didn't make sense to Blaine was when he was told that his membership dues would more than double.

“We are only in North Carolina,” Blaine explained. “Prior to the merger, we had the entire (NCUL) staff and they were doing a great job. Now we have half of their time and energies and we are going to pay twice as much. I have a hard time explaining that to the board and other people.”

However, Blaine said that CCUL has since backed off its proposal to increase membership dues.

“Small credit unions want more services (from their league) and larger credit unions want lower costs (from their league),” Blaine said. “Those issues are being kicked down the road, but they are not going to go away because we all agree that the number of credit unions is going to continue to shrink, if not accelerate. Those issues need to be addressed.”

Last fall, SECU backed a proposal that would have allowed CCUL to conduct a one-year test pilot program that would have allowed CCUL members the choice of joining CUNA or the league.

The objective of the pilot program was to observe what impact affiliation choice would have on the state league and CUNA, including changes in affiliations rates, dues revenue, and what affect would affiliations choice would have on legislative, regulatory and political affairs.

But Blaine said the test pilot program was not accepted by CUNA and CCUL late last year.

Blaine wrote a Jan. 31 letter to John Radebaugh, president/CEO of the Carolinas Credit Union League, informing him that SECU would not renew its 2014 membership.

“SECU asked that consideration be given for credit unions to have the option to separately choose between membership in CUNA and the league,” Blaine wrote. “The right to independently choose membership and to have direct representation in CUNA appears to be very much in line with our core cooperative principle – one member, one vote.”

Blaine's letter continued: “The accelerating pace of the merger/dissolution of credit unions, paired with the resulting consolidation of numerous leagues, would indicate an urgent, inevitable need for structural changes in our trade association, if cooperative principles are of key importance.”

Radebaugh responded to Blaine's letter: “We believe affiliation provides great mutual benefit for our organizations and are disappointed in your decision. Nonetheless, we respect your decision and appreciate the notice.”

CUNA President /CEO Bill Cheney also responded to Blaine's letter and invited him to meet with the CUNA executive committee later this month. Cheney also noted in his letter that incoming CUNA Chairman Dennis Pierce (CEO of CommunityAmerica Credit Union in Lenexa, Kan.) is appointing a Renewal Review Committee to look at Blaine's concerns and others immediately following the CUNA Governmental Affairs Conference.

Blaine wrote a brief letter responding to Cheney, writing: “Glad Dennis has appointed a committee. That should be helpful. SECU does not have any remaining concerns which require discussion. Wish you and CUNA the best of luck in the future.”

CUNA to Modify Budget

CUNA will modify its 2014 budget to make up for the disaffiliation of the $27 billion State Employees’ Credit Union.

“This disaffiliation happened early enough in the year that we can make the necessary adjustments to deal with it,” Pat Keefe, CUNA's vice president of communications, told Credit Union Times.

“We do budget and plan for items such as membership attrition and dues waivers, as well as re-affiliations,” he added.

The North Carolina credit union would have paid $340,000 in membership dues this year, $250,000 to CUNA and $90,000 to the Carolinas Credit Union League.

“SECU asked that consideration be given for credit unions to have the option to separately choose between membership in CUNA and the league,” SECU President/CEO Jim Blaine wrote in a letter to CCUL President/CEO John Radebaugh.

Keefe said dual membership in both CUNA and the leagues by credit unions has been required since the 1990s.

“This ensures strong representation for credit unions at the state and national levels, and (in particular) gives us grassroots reach that no other trade group can match,” Keefe said.

Facebook Discussion on SECU Decision

CEO Jim Blaine's decision for State Employees’ Credit Union not to renew its membership with CUNA or the Carolinas Credit Union League has sparked some debate on Credit Union Times’ Facebook page.

The $27 billion SECU's decision to disaffiliate stemmed in part from the dual membership requirement that requires CUNA membership to belong to affiliated state leagues.

David LeNoir Sr., member relations consultant at the League of Southeastern Credit Unions, expressed his dismay that “at the very time credit unions need to rally and support one another, SECU takes the decision to withhold support of its state league.”

Reader Matthew Cropp wondered if “this is symptomatic of the logical end-point of the merger and consolidation trend that has been afoot since the professionalist faction won the share insurance fight in 1970.”

According to LeNoir, collaboration with, and not consumption of, smaller credit unions should be an option, and leagues can assist in supporting this relationship.

Cropp agreed in principle, commenting that “credit unions rooted in authentic community are the best exemplars of our movement's values. Unfortunately, though, it's going to take some MAJOR structural changes to remove the driving forces behind the tide of professionalization and consolidation, and the political will to counter that inertia does not seem to exist in anything close to a critical mass at the moment.”

Blaine also cited the ongoing trend of credit union mergers as a reason the CUNA and affiliated league business model needs to change.