"The task force believes that the most effective advocacy model is one in which credit unions are members of both their league and CUNA, but that does not necessarily mean that credit unions should be required to belong to both," according to the report. "Ultimately, the task force believes it should be each credit union's choice as to which trade associations it joins. Therefore, the task force is recommending that CUNA no longer require league membership in order to belong to CUNA, and that leagues need no longer require membership in CUNA for league membership."

Overall, 42% of CUNA members surveyed favored the option of choosing CUNA and/or league membership separately. Large credit unions (59%) favored membership choice at twice the rate of small credit unions (31%). 

The task force said it carefully considered at least six arguments to retain dual membership, including coordinated advocacy actions and maintaining adequate resources to support advocacy. However, the task force also looked at the six arguments in favor of membership optionality and found them to be more compelling, including the first of the seven cooperative principles, which supports voluntary and open membership.

"Membership optionality, properly executed, will foster a more inclusive, open system of voluntary membership," the report stated. "Effective advocacy requires an engaged credit union industry. True and effective engagement cannot be required, it must be earned. Membership optionality should provide for more engagement of credit union to bother their league and CUNA."

The task force also pointed out that a plurality of credit unions responding to a CUNA survey favored membership optionality, and the large credit unions held that view by a two-to-one margin.

"The task force understands that separating membership requirements of leagues and CUNA could be disruptive. Doing so will impose challenges and financial pressures on both," according to the report. "However, the task force believes those challenges are surmountable, and that membership optionality will create a sense of urgency and positive incentives for both leagues and CUNA to be more efficient, member centric, and responsive."

The task force also argued that under a system of membership optionality, leagues and CUNA would receive much better signals as to their performance and the attractiveness of their value propositions. Each affiliation rate would be the direct result of potential members' evaluation of its own effectiveness, not that of the broader system, which would in turn drive improved value to credit unions.

Nevertheless, the CUNA board voted not to adopt the member optionality recommendation.

"The board believes that by working together, CUNA and the leagues are best able to serve credit unions, whether it's through advocacy or member services," CUNA Board Chair and Woodstone Credit Union President/CEO Susan Streifel Streifel said. "CUNA is dedicated to changing and evolving. At this juncture the board believes that the current membership structure is optimal."

Under its second recommendation for CUNA system interdependence, the task force suggested leagues and CUNA execute an agreement that commits to practices and procedures in advocacy that promote collaboration, efficiency and joint efforts, including the establishment and support of a system-wide credit union advocacy agenda.

The task force also recommended providing financial and other incentives to credit unions that belong to CUNA and also a league to promotes each other's value proposition.

In response to the task force's conclusion on advocacy, the board said it took steps to ensure that its advocacy committee – formerly called the government affairs committee – was positioned to serve the needs of member credit unions.

"This realignment reflects changes already put in place in CUNA's Advocacy Department," the CUNA board stated. "The Advocacy Committee will have expanded reach and scope beyond its predecessor committee, including an enhanced subcommittee structure designed to optimize CUNA's advocacy effectiveness." 

The task force's third recommendation over CUNA's current governance structure focused on industry consolidation. While industry assets and total memberships are rising, the task force projected the number of credit unions would fall below 5,000 by 2024. (Click on the graphic above to expand.)

The report also noted that in 1994, the largest 250 credit unions represented 39% of total credit union assets and 29% of memberships. By 2024, however, CUNA projected the largest 250 credit unions would hold 60% of industry assets and 55% of memberships.  (Click on the graphic at left to expand.)

"These observations suggest the CUNA/League System needs both to provide assistance and support to those small credit unions with the best opportunities to survive and grow, as well as to enhance trade association services desired by those credit unions serving the majority of credit union members," the task force wrote.

In addition, the task force reported that some have suggested the size of the board was not optimal, as it made communication and decision-making cumbersome. Most credit unions responding to the survey expressed satisfaction with the current board size, but larger credit unions believed, by an almost two-to-one margin, that the current board was too large.

The task force recommended to reduce the board size to 15 members and create two classes of credit union board seats:  Six Class I directors (smaller credit unions representing half of total credit union memberships), elected by and from 6 districts; and, six Class II directors (larger credit unions representing half of total credit union members), elected at-large nationwide.

The CUNA board rejected the task force's third recommendation as well.

"We believe the current board size is effective and reflects the enormous range of geographies, asset sizes and distinct needs of our member credit unions," Streifel said. "The committee will look at the board's nominating process and governance policies and report back to the board with any suggested amendments."    

However, the board referred other task force recommendations regarding its nomination process and governance policies to an ad hoc committee that will be appointed by Streifel. That committee will report its findings back to the CUNA board.