IOWA CITY — With lawmakers and regents twisting the metaphorical arm of the state’s largest credit union to drop from its name a reference to the unaffiliated University of Iowa, the $4.79 billion financial institution is seeking a new moniker and asking its members for help.
According to a message the University of Iowa Community Credit Union sent to more than 100,000 of its members Tuesday, the entity has until April 30, 2019, to change its name. The union had considered fighting the mandate, which became law in May when Gov. Kim Reynolds signed a bill carrying an amendment that credit unions “shall not include the name of any public university located in the state of its name.”
But, instead of pushing back, the credit union’s board of directors over the weekend voted unanimously to “comply with the law and move forward with the change,” according to the UICCU message to members.
“Although this new law was a bit of a surprise, we’ll use this development as an opportunity to build and strengthen our existing brand,” UICCU President Jeff Disterhoft wrote in an email to members Tuesday.
The credit union started in 1938 as the State University of Iowa Hospital Employees Credit Union, aimed at serving the hospital staff. In 1966, it expanded to serve all staff, students, and alumni when it became the University of Iowa Credit Union. The addition of the word “community” came in 1988, when the organization expanded its charter to serve residents unaffiliated with the university.
The union estimates about three-quarters of its 181,000 members are not UI-connected.
In December, the credit union reported $4.67 billion in assets — making it the largest financial institution in the state. It dropped to No. 2 as of March 31, when it reported $4.79 billion to Bankers Trust’s $5.21 billion in assets.
The name debate started earlier this year after Larry McKibben, a member of Iowa’s Board of Regents, raised concerns over university names attached to unaffiliated organizations. He specifically mentioned controversy involving Wells Fargo of late, and said he didn’t want one of Iowa’s public universities to be marred by any similar credit union storm.
ARTICLE CONTINUES BELOW ADVERTISEMENT
Disterhoft raised an eyebrow at McKibben’s motives, noting the regent is part owner of Farmers Savings Bank in Marshalltown — a fact McKibben hasn’t disclosed on required conflict of interest forms.
McKibben told The Gazette he never felt compelled to disclose his shares because feels it’s unrelated to his regent work. But Disterhoft disagreed, noting growing discord between banks and credit unions that recently culminated with a Legislative dispute over how they should be taxed.
Disterhoft said when McKibben starts advocating for regent policies affecting credit unions, his bank ownership qualifies as a conflict.
After the state passed its law requiring both the UI and University of Northern Iowa credit unions change their names, the Board of Regents last week approved a new policy barring unassociated entities from using university trademarks in their names.
The board policy, unlike the state law, is not retroactive — meaning it only affects naming going forward.
In a “frequently asked questions” document linked through the credit union member message, Disterhoft notes his organization is forming a committee to create and vet possible names that it will present to the board of directors for approval in late summer or fall.
A membership vote is not required for a name change, which could cost about $2.5 million — for new signage, documents, collateral material, cards, trademarks, and other communications.
“For perspective,” according to the FAQ, “this estimate is .9 percent of our projected annual revenue.”
ARTICLE CONTINUES BELOW ADVERTISEMENT
Thank you for signing up for our e-newsletter!
You should start receiving the e-newsletters within a couple days.
The list of answers notes leadership will develop a new name that is “simple and not geographically constrained.” The name change will not produce reciprocal changes to staff, branches, products, or member account numbers — meaning it won’t require members to order new debit cards, credit cards, or checks.
The credit union will continue to measure success by how well it supports and provides for its members, communities and staff.
“While we respect and honor our heritage, nothing will change our commitment to serve these three stakeholders,” according to the FAQ. “In fact, if we can keep improving in these three areas, we predict our success will be even greater.”
Members wanting to submit ideas for a new name can visit this “feedback” link.
l Comments: (319) 339-3158; firstname.lastname@example.org