Let Bankers Respond to Credit Union Charges

The list of what banking industry lobbyists find objectionable about individual credit unions and CUs in general is a very long list that seems to be getting longer by the day. Add to that list, bankers’ complaints about national and state credit union trade groups, as well as state and federal credit union regulators and the list gets even longer. There are so many things that the banking industry doesn’t like about the credit union industry. And they make those views well known at every opportunity that presents itself. At the very top of the list, bankers don’t like it (to put it mildly) that credit unions have a not-for-profit tax exemption. They also argue long and loud that credit unions do not shoulder the same heavy regulatory burden that banks do, citing the defeat of CAP (a.k.a. CRA-Lite) as a prime example. The banking industry has its own interpretation of who should be eligible for credit union membership and how big credit unions should be allowed to become. They also complain when credit unions build new facilities in their backyards, especially full-service branches. Banks don’t like it one little bit either, and say so, when CUs introduce innovative products and services. Or when credit unions convert to community charters. And especially when CU regulators interpret laws in ways that make it easier for credit unions to expand. The pages of Credit Union Times are filled with timely and detailed news stories describing many more examples. Some bank attacks are new (“traditional” CUs are good; “bank-like” CUs are bad.) Most are decades old (taxation). Only the players and battlefield locations change. Like the sneaky way the Utah Bankers Association is grabbing local and trade press headlines by a relentless attempt to stymie credit union growth in that state by blaming credit unions for a state budget deficit that is impacting the educational system. Every time I hear about the latest attack by the banking industry, like the ridiculous Utah situation in which bankers can now add the word “hypocrites” to all the others that have been used to describe their battle tactics, I find myself asking this question: Isn’t there anything that the banking industry does that credit unions don’t like? Anything at all? Are banks and all those groups that represent them so pure that there is nothing to criticize them about? Think about it! Is this whole thing between banks and credit unions simply one where credit unions are destined to only react rather than act? Are credit unions going to forever remain silent until the banking industry decides it is time to throw another punch? Take the barrage of letters to the editor, for example, especially those appearing frequently in publications that have a majority of their readership coming from the banking industry. Typically they feature charges and counter charges between the banking industry and the credit union industry. But the bank viewpoint always appears first. It usually goes something like this: A bank spokesperson makes outlandish charges against credit unions in a letter. Because the letter is signed by an individual, that individual is responsible for its accuracy, not the publication in which such a letter appears. Almost always these letters contain falsehoods, exaggerations, misleading information, a misrepresentation of the dispute being addressed, or a little of all of the above. Almost immediately, the credit union industry rises up to cry foul. As certain as the fact that the Green Bay Packers will not be appearing in the Super Bowl this year, a strong reaction letter can be expected to appear from the credit union camp. A spokesperson, usually representing one or both of the national credit union trade groups, takes great exception to the bank speak letter to the editor. Point by point they attempt to set the record straight from a credit union perspective. Unfortunately, some of these letters are not worth the paper and ink involved. They present the same old credit union bromides (“we are all about people helping people”) rather than addressing the specific charges head on. In fairness, many of these letters do an excellent job of laying out the credit union viewpoint while discrediting allegations that are way off the mark in the original banker letter. It all depends on who writes the letter; not who signs it. All well and good. That’s one of the many things credit union trade groups are paid to do as part of their mandate to represent credit union interests. The banking industry, or for that matter any individual or group that misrepresents credit unions, needs to be taken to task. Readers of such letters must be made aware of the other side of the story if they are to make a judgment and come down on one side or the other of the disagreement. However, just once wouldn’t it be more powerful if the first salvo came from credit unions and it was the banking industry lobbyists who had to leap to the defense of their banking constituency? Which takes us back to the original question: “Isn’t there anything that banks, the trade associations that represent them and banking regulators are doing that is not in the public interest? That credit unions can and should complain about? Of course there is. This is not to say that credit unions should forget about playing defense. As long as the banking industry continues its attack on credit unions, credit unions need to defend themselves. But surely there are ample opportunities for credit unions to write that first letter to the editor that will make bankers spit fire and come roaring back trying to set the record straight and defend the banking industry. For starters, how about a letter accusing the large banks of trying to eliminate the smaller or community banks? Comments? 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