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WASHINGTON – In order to help focus and streamline credit union’s ongoing struggle to refute bankers’ attacks, CUNA has prepared a new document which will gather many of credit unions’ rebuttal arguments into one place. “The bankers’ attacks are unprovoked, unrelenting and unfair,” said CUNA CEO Dan Mica. “If the banks’ outrageous claims are left unanswered, consumers will lose in the long run. This booklet is designed to counter those claims in plain, straightforward language. It is, indeed, straight talk – for members of Congress, consumers and credit union advocates – to read, understand and use in supporting credit unions.” Titled “Straight Talk: Why 85 million Americans Benefit From Credit Unions” the 16-page, full-color booklet allows credit union defenders to pull the different arguments against banker allegations into one place where they can be easily accessed, the association’s political and lobbying staff explained. CUNA plans to provide the document to members of upcoming “Hike the Hill” trips that leagues plan for September of this year. The association will also give the publication to the leagues for them to tailor somewhat with their own local information as well as to some media outlets. Individuals will be able to download it from CUNA’s Web site as well. CUNA is taking the somewhat unusual move of pressing the issue on Capitol Hill in August in part because this August lacks the usual vacation atmosphere that often characterizes Washington life when Congress is not in session. Because of the increased attention to the 9-11 Commission report and the possibility that Congress might be called back to address some of its recommendations, the often sleepy August Capitol has significantly more activity than it has otherwise. “Things are beginning to heat up politically in Washington,” explained John McKechnie, CUNA’s senior vice president for government affairs. “There is this notion that the months running up to elections are something of a political no man’s land, but we are finding that these months may be the most opportune time [to communicate with Congressional members],” he added. Facts, But Not Too Many Broken into 10 separate sections, the document presents in a concise, almost bulleted format how credit unions help their members and how bankers’ assertions about credit unions fall short of reality. Three sections address what credit unions do for their members and why 85 million Americans choose credit unions. Seven sections refute bankers’ assertions about credit unions with only one appearing to attack bankers by calling them greedy. “Banks have posted record profits 13 of the past 14 years. According to The Economist magazine, U.S. banks made profits in 2003 that were equal to about one-third of all U.S. corporate profits in that year,” the document pointed out. “Even smaller banks (those with less than $100 million in assets) on average had a healthy return on assets (ROA) of 0.95% last year. That is about the same as credit unions. And nearly nine out of 10 banks and thrifts had an ROA of more than 1%” These record profits, the document pointed out, have helped feed a galloping rate of growth that was larger last year than credit unions have grown since their beginning 100 years ago. The document particularly challenged the bankers’ “big credit unions are different” argument by pointing out that credit unions do not adopt different governance rules as they grow and that size is a relative thing. “To gain a better perspective, consider that over half of the nation’s banking institutions have $100 million or more in total assets,” the document noted. “Just 12% of credit unions are this large. Fewer than 90 credit unions (83) have $1 billion or more in assets. More than 500 banks top $1 billion.” Attractive Lay-Out And Humor In addition to presenting facts in smaller segments and in almost breezy style, the document also relies on color, strategically chosen pull-quotes and a liberal use of graphs to help make its points in a way that readers will find accessible. It also includes a dose of humor, offering in one section to help any bank that so admires the credit union charter to navigate the regulatory hurdles to become a credit union. A special form that bankers can clip and fax to CUNA to ask for help becoming a CU spells out the landscape that bankers will face with their charter change: “I believe credit unions have a sweet deal by competing for customers on a playing field increasingly tilted toward their advantage, the form read. “In switching from a bank, I understand my newly formed credit union must shift focus of operations from maximizing shareholder profits to meeting member needs; must open its board of directors to democratic elections in which each depositor receives one vote, the majority of those directors would serve as volunteers (unpaid); can only raise capital through retaining a portion of the income stream; must limit commercial loans to 12.25% of total assets; must start calling customers “members,” and treating them as co-owners; [and that] CEO would have to take a substantial pay cut, and miss out on stock options.” The document also drew attention to the more questionable banker claims, such as the notion that credit unions’ tax exemption is a more important issue than protecting the American financial system from terrorist attack. There are a few gaps in the document, however. The paper’s longest section covers credit unions working with their communities and touches on CUNA’s survey of credit unions serving their low income members. But it ignores Community Development Credit Unions entirely, even though the growth and good work in that segment of the industry has been documented recently. Cliff Rosenthal, the executive director of the National Federation of Community Development Credit Unions refrained from commenting on the document until he saw it, but said it would certainly be appropriate for a document that sought to address threats to credit unions overall would speak for the entire credit union industry. No one from the American Bankers Association had yet become available to comment on the document. -

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