FORT WORTH, Texas – In what might be considered his swan song, outgoing NCUA Chairman Dennis Dollar used the analogy of ducks and geese to explain the difference between credit unions and banks to the Fort Worth Chapter of Credit Unions April 27. The event was his last scheduled public appearance as a member of the NCUA Board which he is retiring from on April 30. Dollar briefly mentioned initiatives such as Reg-Flex and Access Across America that were birthed under his leadership, and restated his philosophy that credit unions should, within the boundaries of safety and soundness, be given maximum flexibility to innovate in their service to members. The chairman also spoke of his nearly seven years on the board as "productive," but conceded that challenges lie ahead for the movement, namely the bankers' push for taxation of credit unions. "None of us know what the credit union industry will look like five years from today, but we know it will be more demanding. Despite credit unions' not-for-profit structure, despite serving people from all walks of life, despite serving the underserved who have been abandoned by the big banks who have pulled out of their communities, there are still critics who say it's not a level playing field until credit unions are taxed," Dollar said. "The banks are saying, `If it looks like a duck, walks like a duck and quacks like a duck, it must be a duck.' I propose to you that a goose looks somewhat like a duck, walks similar to a duck, and even sounds a little like a duck, but if you try to breed a goose with a duck, you're going to find a structural difference between the two. They're not the same." Dollar drew parallels with other businesses that provide similar services but are differentiated by their for-profit or not-for-profit structure. "Keebler sells cookies, and the Girl Scouts sell cookies. One sells for profit, the other does not. The difference is their structure. And even though the Girl Scouts sell more kinds of cookies than they did years ago, their structure hasn't changed," Dollar said. "HCA operates hospitals; St. Mary's operates hospitals. Time sells magazines, so does National Geographic. One does it for profit; the other does not. There's nothing wrong with selling for profit, but you have to pay taxes on the profit." The decision to tax or not tax credit unions will be made in the Congress of the United States and in the state legislatures, Dollar said. "You need to be in place to influence those decision makers. Be armed with the facts," he told credit union leaders. Acknowledging that taxpayer dollars have never been expended to bail out troubled credit unions, Dollar stressed that taxation could have safety and soundness implications for credit unions. "The only way credit unions build net worth is through members and retained earnings. Taxation of credit unions would reduce retained earnings and reduce the protection provided by credit unions. Today, credit unions have a net worth ratio of 10.2%; with the taxation proposed by bankers, it would drop to 8.34%. That's $14 billion in protection that would no longer be in the credit union system. That's not good public policy," he said. Banks are taking notice of credit unions, not because they want "equity," but because they are feeling threatened by legitimate competition, Dollar noted. "Credit unions have come of age. In seven years, they've gone from a relatively minor player to such a strong force in the economy and financial marketplace that banks have now made them a higher priority than money laundering and terrorism." Dollar told chapter meeting attendees, which included his immediate family members, that he hopes to remain involved in credit unions, possibly in an entrepreneurial capacity. Reflecting on his credit union roots, he said, "One of my greatest honors working in a credit union was serving a member who, through a credit union car loan, was able to buy a new vehicle, and because he had transportation, could then go and find a job. I think you should be proud that you get up every morning and make a difference in someone's life." -

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