The truth about credit unions

The bankers lobby is at it again. For 20 years there have been record profits in the banking industry, and yet the only thing American bankers agree on - other than charging outrageous fees to consumers - is that credit unions should be done away. Ken Fergeson, chairman of the National Bank of Commerce in Altus Oklahoma, and chairman-elect of the American Bankers Association Governmental Affairs Committee recently launched biased accusations against America's credit unions. The reason for the sour grapes? Bankers lost on appeal an attempt to impose their version of membership rules on the NCUA, the regulator for federally chartered credit unions. The bankers' version would limit growth of credit unions forcing consumers from credit unions into banks. This is very interesting considering the record growth in banks and bank salaries. In a May 3-article, Credit Union Times quoted Fergeson saying, "a society where credit unions' ideas are carried to the extreme would have no government. It would have no social services." Fergeson even had the unmitigated gall to claim credit unions "are parasites. They live off the rest of society. They are non-productive and contribute nothing that is good for anyone other than themselves." What is the reason for his attack? Both federal and state chartered credit unions are exempt from income taxes. They are also exempt from the provisions of the Community Reinvestment Act. CRA requires banks to reinvest a portion of their earnings back into the community from which they are taken. Every credit union I have worked for in Idaho already does that without a legislative requirement for it. If you look into the legislation, this was imposed on banks because, in bank-like fashion they would not police themselves or contribute back to communities without being forced to do so. Credit unions do not pay taxes because they are legally recognized not-for-profit organizations. What the ABA doesn'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. The same consumer in a credit union can vote directly for the board of directors who serve without salary for the benefit of the organization and set the policies for its operations. This has the effect of making the credit union answer directly to the local community because it is controlled by persons within the community. It is a form of democracy in the marketplace which bankers refuse to acknowledge. It is curious that they continue to weep for "a level playing field" and advance the false logic of a failed argument. Credit unions are not subsidized by the Federal government in spite of a constant barrage of propaganda by the ABA. Bankers constantly weep about not having a level field because they do pay taxes. Their version of a level playing field is one without limitations on the fees or interest rates they would charge consumers. Where can you find no fee ATMs? Don't try your local bank. If you don't have an account with the bank whose ATM you use, you will pay up to $2 in fees for a transaction. You may even be billed the same for speaking to a teller at your bank. The credit union for which I work is so small we don't have an ATM, but other larger credit unions allow our members to use theirs without fees. Level playing field indeed! A recent bank merger in Idaho Falls illustrates the point of enormous profit taking by bankers like Mr. Fergeson. The retiring president of First Interstate Bank, recently merged out of existence in the Idaho Falls area, took nearly $29 million dollars in personal bonuses even while closing 12 branches and moving loan decisions out of state via the merge partner! His personal income from the transaction was more than the assets of any credit union in Idaho where I have worked! Yes credit unions do not pay income taxes, because credit unions do not work for profits, they work for people! A credit union is a cooperative working for their members who do pay taxes. There are 70 million consumers who belong to credit unions in the United States. And no matter how much the ABA repeats it, if it weren,t for credit unions, all consumers would be paying 30 to 50% higher rates for loans from bankers would be laughing at them all the way to their bank! Why don't credit unions pay taxes bankers ask? Ask Congress, they advise you. Well I say, don't ask Congress, thank Congress! Every one of the current Idaho congressional delegation voted for the very rules the ABA wants to throw away. In all my years as an employee of any firm, we never had a single visit by a congressional representative until Mike Simpson visited my office a year ago. Thanks for voting for credit unions Mike. Many Idaho Falls families appreciate your courage to keep democracy in financial institutions. Mr. Fergeson, thanks for making our argument for us. America's credit unions, where people are worth more than money! Phil Sorensen Manager Idaho Falls Teachers Credit Union