IOWA CITY — Roiled over a Board of Regents’ suggestion in February that the University of Iowa could be harmed by continuing to allow the state’s biggest credit union to use its name, the UI Community Credit Union president accused one regent of a conflict of interest — hinting at impure motives.
That regent — Larry McKibben, in his fifth year on the board — never has disclosed on annual conflict of interest forms his part ownership in Farmers Savings Bank in Marshalltown.
In the latest forms filed this week, he again did not disclose that as a potential conflict.
“It doesn’t fit,” he said of the regents’ mandate its members list any outside employment, activity or service they or a family member engage in that potentially represents a conflict under state law or board policy.
Yet banks and credit unions have been at loggerheads for years over competition for market share in the financial sector. They most recently are engaged in a dispute over how they should be taxed and regulated.
And that dispute has played out both at the Board of Regents and in the Iowa Legislature.
UI Community Credit Union President Jeff Disterhoft aired McKibben’s bank ties in April after the regent raised concerns about the UI and University of Northern Iowa credit unions, which have no affiliation with the universities.
McKibben led a charge to enact a board policy barring university trademarks from becoming part of unassociated group names — a proposed policy slated for final passage next week.
McKibben said he has not noted his bank ties as a potential conflict because the bank doesn’t do business with the universities.
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“I view that as a matter of, are you doing some form of business with the universities? Are you selling something?” he said. “I have no connection at all with any of the three.”
Still, publicity over McKibben’s suggestion in February that university names attached to unaffiliated entities could cause harm to the Board of Regents’ reputation presaged lawmakers’ decision in May to adopt a measure barring credit unions from using public university names in their titles. The measure, if signed into law, could force the UI Community Credit Union to change the name it has used for decades.
Gov. Kim Reynolds has yet to sign that bill. But his week when asked about the provision, she seemed to agree with the legislation. “I don’t think that’s unreasonable to ask for them to do that,” Reynolds said. She has until Monday to take action on the bill.
But this weekend, Disterhoft said, his credit union’s board of directors will meet to talk about either changing the name or fighting in court if the provision does become law.
And he continued to question McKibben’s decision against making his banking ties public.
“I always err on the side of full disclosure,” he said. “I don’t know what the upside would be to not disclosing it.”
McKibben said he’s had no contact with the governor’s office or lawmakers on the topic and was “just as surprised as anyone” to learn of the proposed law.
He said he’s been more focused on the board’s new trademarks policy that would mandate review and license agreements for entities to use protected marks and bar unattached organizations from using marks in a name.
It’s unclear whether the board policy would be retroactive, but the state rule apparently would be, according to lawmakers — separating the North Liberty-based credit union from the UI name for the first time since it started in 1938.
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UI employees organized the credit union under the name “State University of Iowa Employees Credit Union.” In 1966, it changed the name to University of Iowa Community Credit Union and eventually expanded its reach beyond just UI employees. It now boasts 16 branches, 170,700 members and assets nearing $4.7 billion at the end of 2017, according to annual report.
Earlier this year, lawmakers proposed a measure to change the way banks and credit unions are taxed — to either level the playing field, as supporters said, or to impose a new tax on credit unions, as opponents said.
The measure didn’t pass, and the Iowa Credit Union League called it a victory.
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