One of the easiest jobs in the financial services industry is handling public relations for credit unions; one of the most difficult is being responsible for PR for the banking industry. An early definition of public relations was: “Do good and then tell everyone about it.” Because credit union public relations practitioners have so much “good” to talk about, their job is far less difficult than a bank PR person trying to explain away an industry that has become known for talking out of both sides of its mouth. Credit unions aren’t in business to gouge consumers, to fatten paychecks of executives, to enrich stockholders, to lay off thousands of employees because of poor management, or to try and stamp out legitimate competition. Credit unions don’t have as priority number one a big fat bottom line. Furthermore, credit unions do not constantly attack the banking industry, file state and national lawsuits against banking initiatives and bank regulators, or constantly whine to state and national legislators about unfair competition. Nor are credit unions hypocrites. What credit unions do is provide member/owners with low rates, reasonable fees, convenient services, and a market basket of products and services. And they do so as not-for-profit financial cooperatives. What a great story for CU PR folks to tell. Contrast that to the difficult task of trying to paint the banking industry in a favorable light when it is revealed that its definition of doing good is primarily doing good for itself. For example, a scheme by a number of large banks to avoid state taxes was recently exposed in a front page article in the Wall Street Journal (see page one story). These banks created what is known as RICs (Registered Investment Companies). According to the Wall Street Journal, which uncovered the elaborate scam, in California alone this maneuver cost that budget-strapped state $46 million in 2000. The numbers are also high in several other states. Among those deeply involved in RICs is the very same banking corporation, Zions Bancorp of Utah, which is the lead dog in a thus far unsuccessful effort to wipe out credit unions as formidable competitors in its backyard. Zions reportedly set up not one but two RICs. Besides coverage in the WSJ, all of Zions’ shenanigans have been duly reported in all major Utah media, a PR nightmare for those spin doctors representing Utah banks that are included in the ABA lawsuit against NCUA. Of course, as banking PR types are well aware, this latest embarrassment comes on the heels of a growing list of banking industry hypocrisy. Banks in Wisconsin found a lucrative loophole by creating offshoots in the state of Nevada. But they too got caught. Ironically, CUNA’s upcoming Future Forum (annual convention) will take place in Reno. Credit union public relations staffers ought to be able to make some hay while hundreds of CU folks are in town. Then there is the rush by a rapidly growing number of banks of all sizes to convert to S-Corporations. At the same time, they are seeking changes that would make S-Corporations even more attractive, tax-wise, to even more banks. Also lurking just around the corner is a further tax avoidance plan to allow banks to become limited liability companies (LLC). All perfectly legal, say the banking PR types. Are they conveniently overlooking the fact that the long-standing credit union tax exemption is also perfectly legal? Meanwhile, large banks are gearing up for another round of mega-mergers to further stifle intrastate competition among their banking brethren. Despite alleged unfair competition by credit unions, bank stock prices have steadily improved over the last months. This puts them in a stronger position to begin gobbling again. Still another banking PR challenge! Pity the banking spokesperson trying to explain all this, as well as record banking industry profits, steadily increasing fee income, expanding market share, and astronomical CEO pay packages. Plus the disingenuous rhetoric of banking leaders claiming that they are going after large credit unions only to protect small credit unions and to help sagging state finances. Unfortunately, it is well known that if a lie is repeated often enough, there are some in high places who will believe it. That’s why as easy as a credit union public relations person’s job is to communicate the truth about credit unions, and the growing hypocrisy of the banking industry, they need all the help they can get. CU PR people can’t do it alone. If they try, the doing good story that is the hallmark of credit unions, will not prevail over the do-as-we-say-not-as-we-do story of the banking industry. Unfortunately, many official and unofficial credit union spokespersons still are not accurately representing the banks versus credit union scenario. Any CU person, who speaks on behalf of credit unions, especially to the mainstream media, needs to have all the facts and be able to effectively communicate them. Forget emotion. Forget softball reasons such as unpaid volunteers. Perhaps the way to improve the credit union message is for the CU trade groups to set up a first rate and ongoing public relations school. Attendance should be mandatory for all league CEOs, all credit union, state, and national PR staffers. Also, all state and national elected leaders. The school’s faculty and curriculum should emphasize up-to-date facts in the war of words between banks and CUs and demonstrate the best way to communicate them. As it is today, many speaking on behalf of credit unions don’t deal with the media and various opinion leaders as effectively as they could and should. (For exception to this criticism, see excellent letter to editor on page 16.) Since credit unions have such a positive story to tell while banks keep finding new ways to shoot themselves in their PR foot, doesn’t a national credit union PR school make sense? 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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