WASHINGTON-As banks and credit unions battle it out on CapitolHill and at the state level, each side looks for numbers to telltheir own story. On the credit union side, CUNA's Economics andStatistics Department stands at the ready with data for creditunions to bolster their argument. "Our reason for being really isto provide the support information about the economy and creditunion finance," CUNA Vice President of Economics and StatisticsMike Schenk said. "As a practical matter, the way that translatesis we end up spending a lot of time doing public relations andlobbying support." Recently, he said, his work has "a lot to dowith the renewed vigor of the bank attacks." Schenk explained, "Thewhole nature of those attacks have shifted quite dramatically overthe course of the last couple years and we've.been forced to go outand tell the story in different and unique ways to get pointsacross." As for the bankers' data, he said, "I've seen more andmore stuff coming from the bankers that raise my eyebrows." Forexample, he held up the data recently released on small bankmarketshare showing it is shrinking due to credit unions withouttaking into account larger banks that are gobbling up many smallerones. Schenk said his department does not participate in thosetypes of shenanigans. "It's not something we're willing to do. Wetend to play by the rules. In my experience, historically, you canget away with half truths and fuzzy pictures for awhile, but oncepeople figure that out, they begin to distrust you." He admitted,however, for CUNA's part, "Our job is obviously to promote creditunions so we do try to present credit unions in a positive light.But that's one of the things that makes my job easy because that'snot hard to do." American Bankers Association Senior EconomistKeith Leggett said he begged to differ on some of the statistics hehad observed from CUNA. He actually thanked CUNA for putting outits recent Straight Talk publication in response to the ABA'sefforts because, in his view, it brought the bankers closer intothe debate. Some of the data in Straight Talk raised Leggett'seyebrows as well. According to CUNA's publication, credit unionmarketshare is unchanged from 1993 to 2003 at around 6%. "One ofthe things you've got to look at, you need to look at the longerterm," Leggett argued. He went back to 1984's domestic assets heldby U.S. banks and credit union assets and compared it with year-end2003. During that time frame, credit union assets rose 200% whenadjusted for inflation, while bank's domestic assets were up just40%. Leggett said CUNA is "overstating" banks' domestic assets inits number. "Credit unions want to make the debate into JPMorganChase relative to credit unions," he stated. In reality, roughlyhalf of banks have assets under $100 million. He reiteratedbankers' latest mantra, "Our whole issue is not with the vastmajority of credit unions.the focus is on the new breed of creditunions." Additionally, Leggett pointed out that Straight Talkoffers household income averages by financial institution usage(Bank Only $76,923; Primarily Bank $74,303; Primarily Credit Union$67,475; Credit Union Only $42,664; Unbanked $17,225). The formerstatistics teacher explained, "Income averages mask distribution ofincome." He cited the 2004 American Banker/Gallup survey, whichfound that credit unions have a better penetration rate (20%) ofhouseholds with more than $75,000 than with those between$20-40,000 (16%) and under $20,000 (13%). "Economists usestatistics like a drunkard uses a lamppost: for support," Leggettconcluded. One of the arguments bankers have made is that communitybanks compete on a market to market basis. "There are small banksthat do compete on the local level and what we try to do is provideinformation at the local level as well," CUNA's Schenk said.Washington Credit Union League Senior Vice President StaceyAugustine remarked, "There is nothing like being able to pick upthe phone and get reliable information from a reputable source."When she needs data to counter banks' information fast, Augustineturns to CUNA's economics department. "Having an economist who canproduce reputable information is invaluable," she said, adding thatSchenk puts together "numbers based on arguments that weresupportable" that she could not do on her own. For example, in thestate of Washington, the banks were making claims that creditunions were the largest financial institutions in the state, but itdid not include banks' out of state assets. Obviously, she said,Washington Mutual is larger than credit unions and that blatantmisrepresentation causes them to lose credibility. "Invaluable" ishow Alabama Credit Union League Vice President ofGovernmental/Public Affairs and Staff Counsel Will McCartydescribed having numbers specific to the state's situation.Community banks in Alabama were spreading their "same old rhetoric"and the league was able to show using numbers from CUNA that thecredit unions are not growing at the expense of banks and bankprofits are not hurting. In Alabama, banks hold 88% of themarketshare and the average Alabama bank is $1.3 billion in assets.On the other hand, the average credit union is just $58 million.Only 3% of banks are under $20 million, while 67% of credit unionsfall under that benchmark. Texas Credit Union League Senior VicePresident of Advocacy Buddy Gill agreed statistics are somethingthe state lobbyists "absolutely need in our arsenal." "It'ssomething that the banks are able to do really well.CUNA is now ina position to help the leagues do that." he explained. The nationalstuff is helpful, Gill said, "but every legislator wants data onthe state level and at the district level if possible." As much asSchenk would like for statistics to be all that is needed inpersuading policymakers toward the credit union position, he admitsit is not. "I think they're one piece of the pie.An anecdote can bepowerful as well," he said. "We use them to fill in the cracks topaint the entire picture," Schenk said, "whereas with some of thebank attack stuff, that is not always the case." As an example henoted how the bankers constantly like to point to Telesis CommunityCU's business lending statistics, when Telesis is in fact one ofthe most prolific business lenders and is not indicative of theaverage CU. Schenk admitted that at one time he shared thementality that "credit unions are taking over the world." Prior tocoming to CUNA in 1992, he worked for the predecessor to America'sCommunity Bankers, back when it represented Savings & Loans andS&Ls were more focused on depositors like the movie "It's aWonderful Life," Schenk said. Now, history has borne out thatcredit unions are not taking over the world, he said, and he isglad he has come around. "It's nice to be on this side of thefence," Schenk said. "It's nice to know you're having a positiveimpact not only on the operations of this organization and thevarious state and local organizations, but having a positive impacton the 85 million or so people out there who depend on creditunions as the only real option out there for a democratically ownedand operated financial institution." -

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