Banking attacks deserve heavy dose of apathy

Credit union folks and the organizations they represent have become quite good over the past several years at responding to malicious and error-prone banking industry attacks. Banking lobbyists have helped credit unions hone their response skills by making a steady stream of accusations against credit unions. Just about the time credit union interests think that they can breathe a sigh of relief because they have once and for all set the record straight, along comes another verbal attack out of left field. The most recent case in point is the sheer nonsense (there can be no other way to describe it in a family publication) spewed forth by Ken Fergeson, a banker from a wide spot in the road in Oklahoma. His ignorance regarding credit unions only saw the light of day because he is also chairman elect of the American Bankers Association's governmental affairs committee. That volunteer position means he'll be able to put the weight of the ABA behind his misguided attacks on credit unions when he communicates with various politicians and financial regulators. Despite his stronger and sillier than usual language, credit union folks were once again up to the challenge. For example, when Fergeson said both in a column in a recent ABA publication, and later in an interview with Credit Union Times, that credit unions do not contribute to the American way of life, credit unions responded. Bob Bianchini, president of the Oklahoma Credit Union League, shot back with this and other statements: "I'd like to think he doesn't speak for the entire banking industry when he characterizes credit unions as parasites. Credit unions and their members do pay taxes," said Bianchini, "lots of them. Fergeson would be surprised to learn that Oklahoma credit unions pay hundreds of thousands of dollars in state taxes each and every year." Fergeson also said credit union managers were greedy and that they take advantage of the tax rules to feed their own egos and line their own pockets. "These greedy managers cost American taxpayers $900 million last year alone," said Fergeson. "I don't hate credit unions, really. A lot of the blame is on the managers," he added. Fergeson also predicted that the credit union tax-exemption was doomed. Then his comments really got nasty! Besides Bianchini, a number of credit unions at the grassroots responded to his barrage of inaccurate information. For example, in a couple of recent letters to the editor printed in Credit Union Times, Fergeson's vitriolic comments were dismissed with comments like this one: "Mr. Fergeson should know that the ultimate payer of all taxes is the end consumer of any product or service." One of the best responses came from the CEO of Idaho Falls Teachers Credit Union, Phil Sorensen, in a thoughtful and lengthy e-mail to me. Among other things, Sorensen said, "Credit unions do not pay taxes because they are a legally recognized not-for-profit organization. What Fergeson and the ABA don't want consumers to know is that when they deposit in a bank, they have no say in the operations or policies of that bank." Well said. Sorensen went on to point out other significant differences between credit unions and banks, especially in his home state where credit unions received full congressional support in the H.R. 1151 battle. Fergeson proved once again that bankers are very skilled at getting under the skin of credit union supporters. But more than any other banker in recent memory, Fergeson's comments were so off the wall that it finally hit me that once again that credit union people were letting bankers set their agenda. Bankers spout off! Credit unions respond! Act! React! It never seems to happen in reverse. As good as the verbal and written responses were to ignorant comments like Fergeson's, I think it's time for credit unions to employ a completely different strategy when bankers open their mouths to spew forth anti-credit union venom. Let me explain it this way: when someone was once asked his opinion on whether apathy or ignorance was the biggest challenge facing credit unions, he said, "I don't know, and I don't care." That's the way we ought to approach people like Fergeson when they spout off. We simply need to ignore them. Why give their stupid utterances validity by not only responding immediately to them, but doing so in considerable detail? Incidentally, another thing I've noticed is that most credit union responses also contain errors as they attempt to explain the credit union difference. For example, one credit union respondent to Fergeson stated emphatically that credit unions shouldn't be subject to Community Reinvestment Act (CRA) provisions because all credit unions already do what CRA requires voluntarily. Oh? Another said that having unpaid volunteers is what makes a credit union a credit union. Not really! Others attacked bank profits and staff salaries. Not relevant! Comments like these give added fuel to banker arguments. The best thing that credit unions could do after a guy like Fergeson shows his considerable ignorance is to treat him in kind, with ignorance, and then with a heavy dose of apathy. Frankly, I need to practice what I preach. When I first thought of doing this column, I was going to take Fergeson on point by point. But then I thought, why bother? Fergeson is the kind of guy who will just fade into the woodwork sooner rather than later. That is, unless we keep him alive by putting him on the front page like we did at Credit Union Times (May 3, 2000). In hindsight, I wish our editors had instead chosen to ignore his nonsense (there's that family publication word again) completely, or at least buried his rantings in the back of the book. I think it's time that credit unions concentrate on disseminating positive facts about credit unions, but not as an overreaction to banking industry attacks. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail mwelch@cutimes.com.