Corporate Actions Called a 'PR Debacle' as Bailout Charges Go Viral
The online fallout from the "Credit Union Bailout" headlines continued last week.
And a few bankers were weighing in on the corporate crisis, with snipes at the CU tax exemption.
"The government had to set up a $6 billion line of credit to bail out corporate credit unions. You know, the ones that don't pay any taxes," said the Oklahoma Bankers Association on its website.
One online financial publisher, the Oregon-based The Financial Brand, said a Google search showed 300 different stories about the failure of the three corporate credit unions "with many of those reports inaccurately characterizing the conservatorships and the NCUIF payback plan as a 'bailout.'"
The Brand's author, Jeffry Pilcher, also claimed a "PR debacle" occurred over the bailout controversy and took credit union trade groups to task for failing to adequately prepare the public for the prospect of government intervention on the corporates.
The negative attention on CUs, he charged, "raises two very important questions for credit unions. First, why wasn't the credit union industry more prepared for the potential fallout from a massive government intervention? It's not like many leaders in the industry didn't see this coming. Second, how will the credit union industry respond the next time there's a crisis?"
In its e-mail bulletin last week, the Medford, Ore. firm said that based on a Google compilation, the original Wall Street Journal article, "Credit Unions Bailed Out," recorded more than 374 comments, a Huffington Post article generated 287 comments, Yahoo had 188 and Fox over 100.
Mark Wolff, CUNA senior vice president, repeated an industry argument that the bailout headlines were "going to generate negative press; there was no way around it. But by any objective measure, this was no PR debacle."
"The bailout headlines were unfortunate, but many stories avoided that headline and most correctly reported that credit unions would bear the cost, not U.S. taxpayers. Credit unions are saying their members did not overreact, and credit unions had the facts in hand to reassure those who had questions, often using tools that CUNA and the leagues were quick to supply," he added.
A spokesman for NAFCU said it had already contacted The Wall Street Journal and other media "to correct the erroneous characterization and are working to help move beyond this story now and refocus the attention on all the good things credit unions are doing."
A spokesman for ABA said it has refrained from issuing any formal press releases on CU corporate problems, suggesting it has plenty of experience in dealing with bank bailout mentions in the media. "But we love the fact that you guys aren't calling it a bailout," the spokesman laughed.