Slate Hit Piece Reveals Identity Crisis: Executive Editor's Column
Just when I was ready to crown myself Queen Jawdropper 2013 after last week’s column, “Credit Unions Are Knocking on Death’s Door,” Slate published a story Dec. 11 that one-upped me.
I’d known for a couple of months that reporter Daniel Wagner was investigating the cozy relationship between new NCUA Board Member Rick Metsger and the Northwest Credit Union Association, and by extension, CUNA.
Wagner’s story wasn’t the first time that relationship raised eyebrows.
Credit Union Times was able to break the news of Metsger’s impending nomination because of information that leaked out of the NWCUA, referring to the potential nominee as “our guy.”
Metsger’s history with the NWCUA was on display during his confirmation hearing, too. As is common during hearings on Capitol Hill, senators on the Banking Committee had to put the event on hold while they voted on bills. During those breaks, Metsger had two handlers: NCUA Director of Public and Congressional Affairs Todd Harper and NWCUA CEO Troy Stang. I was still relatively new to covering Capitol Hill, but even I knew Stang’s close range was odd.
Then, I’m told when news of Metsger’s confirmation broke, executives attending a dinner at the American Association of Credit Union League’s summer meeting in Boston cheered, high-fived each other and gleefully declared that “their guy” was on the NCUA board.
Not the best start for a regulator.
I considered writing my own story on the subject, in an attempt to scoop Wagner, but after investigating the relationship, I couldn’t find that Metsger had done anything illegal. I haven’t worked with him long, but Metsger seems like a pretty honest and genuine guy. His relationship with the league may be inappropriate, but to report that as news would come off as sensational and border on subjective.
Which brings me to Wagner’s story, which from the credit union perspective, indeed comes off as sensational and subjective.
Contrary to what many believe, I don’t think Wagner is a hired gun for the banking lobby. I wouldn’t be surprised to learn he was tipped off by those folks, but he’s no friend of bankers, either. In fact, he won two reporting awards in 2010 for stories investigating banks’ use of bailout money and then-Treasury Secretary Tim Geithner’s cozy banker relationships.
Wagner writes for the left-leaning Center for Public Integrity, and despite his impressive resume, he presented the rather naïve opinion that regulators should only regulate industry, and not support it. In fact, balancing those conflicting responsibilities is one of regulators’ toughest tasks. Regulators that don’t consider how a rule will burden an industry will eventually find themselves out of a job, because they’ll regulate the industry to death. (Are you listening, CFPB?)
I’m also puzzled by Wagner’s issue with NCUA Board members having recent credit union experience. Just imagine if they didn’t. Seems to me that would be a bigger concern.
Despite these issues, however, Wagner did make some very good points in his article. First and foremost is the contrast between how the credit unions present themselves to the public and on Capitol Hill, compared with reality.
The credit union industry is no longer a movement. There’s no sweeping effort to charter more credit unions. Rather, mergers are decreasing the ranks. Yes, the number of members is growing, but Bank Transfer Day marked the first time in ages that philosophy, not pricing, attracted new members. For Pete’s sake, many credit unions don’t even use credit union in their branding. Most don’t mention the word cooperative in marketing materials or internally with staff.
We’ve covered credit unions that do a great job of attracting members to their annual meetings and fostering a truly democratic process. But most bury announcements about accepting volunteer applications deep in their seldom-read newsletters, and schedule annual meetings during the day to purposely discourage attendance. Employees dominate annual meeting vote counts, and are sometimes encouraged to support particular volunteers on the ballot.
Don’t tell me it doesn’t happen. I’ve been one of those employees.
Thanks to growth, regulatory requirements and the commoditization of financial services, credit unions don’t treat their members much differently from banks. Sure, there are the regular members that tellers greet by name, but my dad gets the same friendly service from his favorite teller at Wells Fargo.
Though flawed, Wagner’s article does accurately reveal an uncomfortable truth: like any successful industry, credit unions are in need of some reflection and soul searching to ensure they are walking their talk.