One week after Gov. Kim Reynolds signed a bill that bars credit unions from using public university names in their titles, the Board of Regents on Thursday followed suit by adopting a new policy prohibiting university trademarks from becoming part of unassociated group names.
These rules directly affect the 80-year-old University of Iowa Community Credit Union and the 63-year-old University of Northern Iowa Credit Union, and they follow concerns Regent Larry McKibben raised in February about potential harm such misleading associations could cause the public universities.
McKibben, at the time, revealed he didn’t know whether the credit unions were associated with the universities — which he said is a common confusion among his constituents. And, finding out the groups aren’t connected, McKibben cited recent controversies involving Wells Fargo and fear potential scandals ensnaring the credit unions would reflect poorly on the universities.
“I think it’s a problem,” his regent colleague Patty Cownie said in February in agreement. “I think it’s controversial. I know it’s controversial.”
University of Iowa Community Credit Union President Jeff Disterhoft said his group’s board will meet Friday and Saturday to talk about whether to change the name or fight the new state law — noting he’s split on whether the UI association has been a pro or con. Some customers like the university and thus think favorably about the credit union. Others think they have to be associated with the university to join, keeping them away.
Whichever way his group goes, Disterhoft has expressed indignation over the debate’s genesis with McKibben, who is part owner of Farmers Savings Bank in Marshalltown, according to public records kept by the Federal Deposit Insurance Corp. and the Secretary of State.
McKibben, in his fifth year on the board, never has disclosed that connection — including in his most recent annual conflict disclosure filed in May — saying it’s unrelated to his regent role and “doesn’t fit” as a conflict.
Disterhoft disagrees, citing growing discord between banks and credit unions in the state that recently culminated in a Legislative dispute over how they should be taxed and regulated. He said McKibben’s advocacy for a board policy affecting credit unions makes his bank ownership a conflict.
Still, Justin Hupfer — CEO of PolicyWorks, the lobbying arm for the Iowa Credit Union League — recently told The Gazette the league doesn’t plan to challenge the new law or policy with lawsuit or other action.
Although the UI and UNI credit unions aren’t associated with their institution namesakes today, both have roots with the campuses — as employees started them decades ago. The UI Community Credit Union over the years has swelled to among the largest Iowa-based financial institutions.
As of Dec. 31, 2017, it was the largest by assets, reporting $4.67 billion. As of March 31, it has dropped to No. 2 in assets, reporting $4.79 billion to Bankers Trust’s $5.21 billion in assets. That Iowa-based Bank has seen growth from its $4.47 billion assets report in December.
The UNI Credit Union reported $22 million in assets as of Dec. 31, 2017.
The new state law appears retroactive, requiring unions change their names. The Board of Regents rules are forward-thinking, preventing unaffiliated organizations from claiming connection by name in the future.
In an initial iteration of the proposed regent policy — which requires outside people, organizations, or entities to go through a review and obtain a written license agreement to use protected marks — the board provided a list of exceptions, including use by the media for purposes of reporting; use by artists for work not sold for profit; use in a congratulatory or supportive advertising message; or other non-commercial use “determined to be in the best interests of the institution.”
Those exceptions were scrapped in the final version passed Thursday, for simplification, officials said. l Comments: (319) 339-3158; firstname.lastname@example.org