With the exception of an impromptu clash over the credit union tax exemption, the Federal Reserve Bank information seminars that joined credit union and community bank CEOs finished the month with a wary but shared camaraderie.
Though the CU network of CEOs taking part in the series of March meetings of the Community Depository Institutions Advisory Councils at Fed district banks was still forming, there continued to be widespread industry support for participation in the meetings.
"I was really surprised to learn how much we and the banks really shared in dealing with the efforts to build loan volume," said Ron Barrick, president/CEO of Advantis CU of Portland, Ore., and the CU representative to the CDIAC of the Federal Reserve Bank of San Francisco.
The San Francisco Fed remains the only CDIAC with just one CU representative– Barrick–but is planning to add another one, said the Advantis CEO. He said he did bring up member business lending during the table discussion at the Fed’s debut meeting and none of the bankers made a comment.
That has not been the case at a handful of other CDIAC meetings, where some CEOs of community banks have sniped about CUs having a tax exempt advantage to extend business loans at lower rates.
And sharing an elevator on the way up to the inaugural CDIAC meeting March 16 at the Cleveland Fed, Gary Soukenik, president/CEO of the $770 million Seven Seventeen CU of Warren, Ohio, said he was lambasted by bank CEOs, challenging him on the tax exemption.
Soukenik told Credit Union Times he retorted, "If you think the grass is greener, why don’t you convert if you think so much of the credit union charter."
Other CEO members of the now exclusive Fed Club of CDIAC panelists privately cheered Soukenik’s response."Good for him," said one CEO.
Despite the sniping, Soukenik said the Fed session was productive as he and the bankers engaged in a wide-ranging discussion of financial trends in the district as well as pressing topics, including debit interchange, payments developments and compliance burdens.
"We did have some lively discussion about the emergence of so many new outside players in the payments area, including all those unregulated vendors and online firms," said Soukenik.
The Warren CEO said he was particularly interested in what Cleveland Fed staffers had to report about Walmart’s advance into financial services because his CU competes with Ohio outlets of the retailer.
"We’ve sent our own employees into the Walmarts to check exactly what is being offered, and so I’ll be interested to see what the Fed can tell us," said Soukenik. During the Cleveland Fed session, staffers said they are working on a payments study related to Walmart.
Soukenik said the "educational value from the report’s conclusions will be well worth the time spent in participating in CDIAC meetings.
And in Texas, the two CEO representatives on the CDIAC panel of the Federal Reserve Bank of Dallas, Michael Brown of JSC FCU in Houston and Randy Smith of Randolph Brooks FCU of Live Oak, shared lunch and an all-day discussion with an ex-CU leader, Gary Base, former president/CEO of the converted Community CU of Plano. Community CU became Viewpoint Bank in 2005.
Base along with Brown and Smith were among the 12 members of the CDIAC panel that sat through a March 28 briefing by the Dallas Fed’s economic team with a give-and-take on lending conditions in the district.
Underscoring the unfamiliarity many CU executives have with the Fed system and its banking ties, few of the credit union CEOs said they knew any of the community bank CEOs on the panel or have ever met any of the regional Fed presidents.
"No, I had never met the San Francisco Fed president, and at our meeting we had a stand in interim CEO who was replacing their new president," said Barrick. The new San Francisco Fed president, John C. Williams, a research economist, started work March 1.
Brown of JSC said Base of the Viewpoint Bank was the only community CEO on the Dallas Fed panel that he knew.
Brown noted said the dialogue with bankers was cordial and the economic information extended by the Fed economists contained in brief remarks by Richard Fisher, Dallas Fed president, was useful "since we found out how much we all have much in common with the same concerns."
Certainly, the decline in lending at both banks and CUs was a shared theme, said Brown, noting that his CU was just now breaking even after a 7% drop off last year.