""Their CEO makes $13 million per year. What? I don't think their members know any of this," Michael said. He found better mortgage rates in the private sector and encouraged people to research before joining."
""Management of a credit union can basically hijack it and make it to enrich themselves as managers instead of serving the members who own it," Howard said. This is the core financial mechanic the $13 million salary story exposes: governance drift."
"Governance drift happens when the people elected to oversee an institution stop representing the people who own it. In a credit union, the board is supposed to be elected by members. But most members never vote."
"When almost no one votes, incumbent board members face no real accountability, and the executives those boards hire and compensate face even less."
Michael from California discovered high overdraft fees, elevated mortgage rates, and a $13 million CEO salary at his local credit union. He expressed concern that members might be unaware of these issues. Consumer advocate Clark Howard acknowledged the critique, emphasizing that credit unions, while member-owned, can suffer from governance drift. This occurs when elected officials fail to represent members' interests, leading to a lack of accountability and excessive executive compensation. Low voter turnout in board elections exacerbates this problem, undermining the cooperative model's benefits.
Read at 24/7 Wall St.
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