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SALT LAKE CITY – Those Utah ad wars between credit unions and banks, highlighted in the fight three years ago over H .R. 1151 and a court suit over field of membership, are heating up again this month-this time following banker defeat in a primary campaign for a Utah Congressional seat. The latest newspaper and radio ads issued by the Utah League of Credit Unions and addressed to “bank customers” were to begin on July 29 and follow a broad-based media barrage a month earlier by the Utah Bankers Association. Attacking the tax exempt issue and suggesting state budget problems make it a convenient time to pursue the tax cause. The new radio ads prepared by the League focus on “choice” and in a turnabout of the wording in UBA ads, argue that the average consumer can indeed find CUs the preferable institution when it comes to services, fees and low rates. “There sure has been a lot of talk about credit unions lately,” intones the announcer citing UBA statements in statewide newspaper ads “that Utah credit unions have certain advantages over banks.” “My family and I couldn’t agree more,” says the announcer, adding that such “advantages allow credit unions to pass on savings to their members in the form of lower fees and better rates and that helps all Utah families.” The radio message goes on to urge “whether you’re a bank customer or a credit union member, take a moment to find out for yourself which financial institution has your best interests at heart.” The UBA ad blitz and accompanying direct mail solicitation to 25,000 CU members charged that some CUs in the state were skirting the law by “acting like banks” and the “largest credit unions” which it did not name had conducted a “mean spirited” campaign in the June GOP primary race for a U.S. House seat. The upset winner of that June 25 race for Utah’s First Congressional district was Rob Bishop, a Brigham City-school teacher and former lobbyist for the Utah Credit Union League. Bishop defeated by a 60-40 margin the UBA-backed Kevin Garn, former Utah House Majority Leader and a cousin of former U.S. Sen. Jake Garn (R.-Utah). Garn, a millionaire Layton businessman and chairman of the First National Bank of Layton, had reportedly put more than $700,000 in a campaign to defeat Bishop who was the recipient of a vigorous get-out-the-vote telephone and mail campaign of the League and Utah credit unions. The League campaign maintained that big money interests had tried unsuccessfully to ensure a Garn victory with the UBA complaining that large CUs, specifically America First Credit Union, Riverdale, and Mountain America Credit Union, of Salt Lake City, had acted improperly as “non profits” by contributing to the Bishop campaign. The CUs countered they had a legitimate right to encourage their members to vote for an individual they or the League had endorsed. Bishop, a former Speaker of the Utah House, had served briefly as a League lobbyist in the tough 1999 battle with banks over multi-county field of membership expansion, an issue which was brought up during the Bishop-Garn campaign. The UBA in its June 27 ad appearing in at least four of the state’s major newspapers brought up the 1999 bank-CU fight and noted that “103 of the 104 Utah state legislators adopted a credit union law that was supported by both the credit union industry and our banking industry.” That law, said the ad, “is apparently working very well.” But now certain CUs, said the UBA, have engaged in “political activities” which “indicate that they would like to have all the advantages of a bank while keeping their tax-exempt status. “With the overwhelming issues facing our state and nation, including the economy, homeland security and funding Utah’s education system, we are confident Utahns will focus on the real issues between now and the general election in November.” The ad was signed by Dale Gunther, president of the Bank of American Fork and chairman of the UBA, and by Howard Headlee, UBA president. In an interview with Credit Union Times, Headlee charged that certain elements of the CU industry are engaging in a “campaign of fear by spreading misinformation,” and he said, “we’re all tired of the bickering.” The full-page UBA ad under a “Dear Credit Union Members” heading, said Headlee, was crafted as a positive means of explaining bankers’ position to the public, and he noted a section in the ad which recognizes the “importance” of CUs in the economy. “We are concerned that the credit unions’ campaign literature would have you think that there are groups trying to eliminate your credit union,” intoned the UBA ad. “Nothing could be further from the truth.” The UBA ad, however, reminded the public that “like all tax-exempt entities, credit unions operate within certain limitations. Any credit union is free to expand beyond those limitations and serve the general public, just like a bank, if they are willing to pay income taxes, just like a bank.” In fact, noted the UBA, during the past five years “24 credit unions have shed their limitations by becoming taxpaying, cooperative banks.” Michael Milovich, chairman of the League’s Government Affairs Committee and president of Carbon Credit Union in Price, said reaction to the UBA ad among his CU members has been negative. “I had maybe 15 or 20 people come up to me and ask what it was all about,” said Milovich who called the UBA campaign “ludicrous.” The banking lobby “simply got whipped and now they’re crying,” said Milovich referring to the Garn defeat. But Headlee of the UBA said his office and banks throughout the state had received positive feedback to their ads. He said many bank customers “agree that some credit unions in the state are pushing the limits” by operating “without a common bond” and using legal loopholes to function like a bank and soliciting customers from Utah banks. “You tell me what the common bond is when a credit union is serving members in five or seven counties,” asked Headlee. Brooke Moea’i, senior vice president of dues support services for the League, said the new ad series was produced with a goal “of educating the public” of what CUs offer. The ad series is being run while the UBA is determined “to go against what we want to accomplish despite punitive print campaigns.” She categorized the June 27 UBA ads as a “knee jerk reaction” to the Garn primary defeat and said the banker ads “have actually turned something into our favor. Now it is something we are having fun with.” The new League 60-second radio commercials are slated to run “for a couple of weeks” in major Utah markets and full page newspaper ads will run for three days in the Salt Lake City Tribune, Deseret News, and the Ogden Standard Examiner. The ads are being produced by the Summit Group Inc. a Salt Lake City agency. -

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