Stuart Perlitsh, the president/CEO of the $329 million Glendale Area Schools FCU, posted a "no to bailout" sign in front of the CU's main branch and warned of "economic terrorism." The CEO was finding new support for his maverick positions in a financial blog and marketing Web site patronized by banks and CUs.
In the meantime, the Glendale CEO said his new "no bailout" sign in front of the main branch in Montrose, which reads "Just Say No to Bailout Banks--Bank Responsibly, Right Here. Right Now," underscores his view that national bailout developments have gone awry.
"Our taxpayer members resent paying for the Wall Street bailout," maintained Perlitsh. "Time and again the taxpayer is getting hit with the bill-it is economic terrorism," adding that Glendale Area Schools FCU is "proud to report we do not require taxpayer bailout money" and is glad not be associated with the likes of Bank of America, Merrill Lynch or AIG.
The CU, he said, is now planning future display banners and marketing material that will read, "Kiss Your Banker Goodbye" and "Did Your Bank Take a Bailout? We Didn't."
Perlitsh's provocative stands, including his touting of Bauer Financial ratings of credit union and bank competitors in January and February until the NCUA asked him to delete his comparisons on the CU's Web site, www.gasfcu.org, have brought him blog and online attention.
One branding firm, Financialbrand.com, that serves both banks and CUs, released the results of a poll it took two weeks ago in which 61% of respondents supported Perlitsh's marketing approach to name competitors as "fair play," while 23% said such policies could induce panic and a deposit run. Another 16% said the online ad was OK, but competitors should not be named.
The Financial Brand also published an interview with Perlitsh, in which he said that he felt he did nothing wrong in posting the Bauer ratings, which showed his CU with "five stars" and lesser stars for other Los Angeles CUs and some banks.
"When Perlitsh showed the board the NCUA's request, he said they were incredulous," said The Financial Brand. "They firmly believe it's within their rights to exploit competitive weaknesses, certainly when drawing off public data."
Perlitsh said he did not suggest to the public to close your accounts, but he said he simply republished information that is already out in the public domain. "Yet the NCUA came down on us like we did something sacrilegious."
"I did the homework for people and let them draw their own conclusions," he added. Perlitsh said he wondered why the NCUA was picking a fight with him when it could be concentrating on poorly performing credit unions instead.
In a statement early last month, the NCUA reminded CUs against "deceptive or misleading" ads relating to bank conditions and noted it had made a request for cooperation to the Glendale CU, with which it later complied.
Perlitsh had charged other California CUs were engaged in a "rogue turf war" with his CU, trying to grab market share and his ad was intended to highlight comparisons of financial stability. He argued competitors like Wescom CU of Pasadena had "failed miserably," based on 2008 losses. Wescom has declined comment on the Perlitsh remarks.
Perlitsh noted that his CU has a capital ratio above 12% and paid 48% of last year's gross income to members in the form of dividends.
"GASFCU is proud of it financial strength and will market this competitive advantage," he told The Financial Brand. "It is all about capitalism, free enterprise and freedom of press."