Some credit union related news events in recent weeks make a person wonder why. For example, why sometimes do credit unions exhibit such a closet mentality? According to a recent report from CUNA which quoted from a banking publication, one of the many latest anti-credit union tactics being employed by bankers is their attempt to actually join credit unions. The purpose is allegedly to have proof regarding how easy it is for anyone to gain membership in a credit union. And probably to gain first hand knowledge on just how credit unions operate and treat their members. CUNA warns credit unions to be on the lookout for this so-called sneaky maneuver. Frankly, I think it is a smart move on the bankers’ part. Just like it would be smart for credit union folks to become customers of banks in their marketplace. How better to see firsthand what banks are not doing as well as credit unions. Or maybe doing better? It’s the same rationale that explains why Burger King Representatives go to McDonald’s and vice versa. It’s called up close and personal market research. Besides, credit unions have nothing to hide from the bankers. Do they? Why are credit unions implementing the so-called “no hats, no sunglasses,” signage policy in the interest of increased security and to help thwart would-be robbers, and then immediately making exceptions? One such exception to the new rule would be members wearing religious headgear. This exception, of course, makes the rule worthless. If I plan on entering a credit union where I am not even a member, for less than honorable purposes, you can bet I’ll first don religious headgear of some kind. Law abiding members cannot wear hats or sunglasses, but robbers can wear full head gear under the guise of religion. Does that make any sense? A recent decision by Eli Lilly Company makes me wonder why some CU sponsors still don’t understand they don’t own the credit union. On June 9th, a policy committee of the drug maker voted to endorse a company human resource policy that would make domestic partners of Eli Lilly employees eligible for membership in the credit union. Oh? Here’s another specific example of one of the problems with single sponsor credit unions. Obviously the company thinks they have the right to set policies for the credit union serving its employees. They don’t. What the company chooses to do regarding domestic partners is their business. The credit union may want to go along with that policy, but that is a decision for the Eli Lilly FCU’s Board to make, not Eli Lilly. Why can’t the banking association in Utah get it through their thick skulls that they lost the taxation battle? Now they are rattling their sabers that they are going to the courts and the U.S. Congress because more and more Utah state chartered credit unions are switching to FCUs to avoid Utah taxation. The Utah Bankers Association messed up badly. In their attempt to divide and conquer the state’s large and small credit unions and get the large ones taxed, they did serious harm to a state budget already in dire straits. Credit unions won this battle and will no longer run scared. Viva la dual chartering system! Under Chairman Dennis Dollar’s leadership, NCUA has done and is still doing during his lame duck period, many good things for credit unions. This may therefore seem trivial, but I can’t help wonder why NCUA has gotten into the business of running radio commercials. Granted, they are public service announcement (PSAs) and thus run at no charge. Granted they emphasize credit union insurance. Do they add fuel to the banking industry’s charges that NCUA has become a credit union cheerleader? Are they consistent with other promotional messages generated in and by the credit union industry? Or, do they have a hidden agenda (note where they are running) that has more to do with the recent interest by certain state-chartered credit unions in converting to private insurance following the lead of Patelco Credit Union? Speaking of who does what, why does CUNA historically get into non-trade association endeavors that eventually go South? The latest example is their CUNA Network Services (CNS) venture. CNS apparently is one of the main reasons CUNA financials are tainted with red ink once again. CUNA itself reports that its share of CNS’s $3.8 million loss for its most recent fiscal year is $1.8 million. Why is a “world class trade association” even in the network services business? It is such a departure by CEO Dan Mica who early in his CUNA career shed the non-trade group money losers plaguing CUNA. One more why: Why does the banking industry continue to talk out of both sides of its mouth and expect its anti-credit union rhetoric to have even a modicum of credibility? For example: banking fees are at an all time high in both number and type of fee and income they generate; the number of charter conversions among banks from C Corporations to the more tax friendly Sub-Chapter S Corporations is skyrocketing; and bank profits and ROAs are reaching new heights despite a soft economy. Also, the number of banks, like those in Wisconsin, setting up out-of-state entities to avoid state taxes is far greater than at first realized. No wonder banks are able to pay record dividends to their stockholders. The numbers to support the banking industry’s claim that credit unions are severely damaging their ability to prosper just don’t add up. Kudos to CUNA on its recent decision to take a far more aggressive stance against the banking lobbyists’ hypocrisy by pointing out all these things and more to legislators, politicians, regulators, community leaders, banking leadership, credit unions, the press, and anyone else who will listen. These examples and many more like them are enough to make a thinking person wonder why. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail [email protected].

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Peter Westerman


Credit Union Times

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