As credit unions continue to grow, prosper, and become more visible, the credit union industry presents such an easy target. No wonder more and more groups besides, of course, those connected to the banking industry, single out credit unions as a way to get some free publicity for themselves at the expense of credit unions and their members. But it doesn’t always work. Latest example is a manufactured study released by a barely known (outside of a small circle of like groups), paper tiger organization, by the name of the National Community Reinvestment Coalition (NCRC). Instead of generating headlines, its big study was met by a big yawn by the press despite the group holding a press conference to release the anti-credit union results. Don’t be fooled by its impressive sounding name. NCRC continues to be a small, and toothless group seeking to position itself as more influential and important than it really is. Almost everyone immediately saw the NCRC study for what it really is; still another attempt to cast a negative shadow on credit unions in general, but especially those over $100 million in assets. “Almost everyone” because of course like they do every chance they get, banking industry lobbyists jumped on the study and tried to make it and NCRC seem a lot more important. That effort also failed. Guess what? News is news and this wasn’t news, but just more of the same old stuff paraded out countless times before. This time around, however, NCRC probably did more harm to their own organization than to credit unions. In reporting on the group’s claim that credit unions over $100 million in assets need to be included under that ongoing banking industry nemesis, CRA (Community Reinvestment Act), Credit Union Times uncovered a possible conflict of interest. It seems that the more financial institutions that are covered by CRA, the more lucrative it could eventually prove to be to NCRC itself (see Credit Union Times 6-15-05 issue, page one and 74 for details). There is definitely a tie in regarding procedures and leadership. Once again, as the group did in previous encounters with credit unions, NCRC played fast and loose with the data to attempt to make its case. Nevertheless, the report was pretty much ignored outside of credit union circles. But credit union representatives, including one of its members and a group that might be expected to be supportive, the National Federation of Community Development Credit Unions (NFCDCU), fired back immediately and forcefully. NFCDCU executive director Cliff Rosenthal actually defended what NCRC classified as large credit unions by saying that these are the very credit unions that are increasingly reaching out to the low income and minority populations with specially tailored and innovative lending programs. There are a number of reasons that we cannot support the recommendation that larger credit unions come under CRA said Rosenthal. Apparently the report’s clever name, “Credit Unions: True To Their Mission,” and its accusation that credit unions “have forgotten their social mission” didn’t sway Rosenthal’s thinking. Or anyone else in credit union land. For sure it didn’t impress NCUA, CUNA, or NAFCU, all of who had something to say about the dud report. NCUA called the report, “nothing new” and went on to say NCRC has always been an advocate of unnecessary and burdensome regulation and continues to ignore the facts that show credit unions taking in record numbers of underserved areas. NCUA backed up their statements with lots of up-to-the-minute stats. CUNA officials blasted the NCRC report calling it “misleading.” CUNA said that once again NCRC misinterpreted HMD (Home Mortgage Disclosure Act) pricing data, which in fact show that low-income borrowers are more likely to be approved for a mortgage loan at a credit union. To support its argument, CUNA supplied figures showing a rise in loan approvals and a decline in denials to the population segment NCRC claimed was being underserved. NAFCU also backed its response with stats that showed credit unions reaching out to low-income consumers. Said the group’s CEO Fred Becker: “Credit unions are constantly developing new products and services to reach out to those populations that most need their help, such as young people, low-income families, and recent immigrants. These are not populations banks want to serve.” To which we might add, even though banks are subject to CRA provisions. Perhaps the next study NCRC does ought to examine the impact on underserved communities caused by banks closing branches, charging exorbitant fees, racking up high loan turn down rates, implementing massive staff layoffs caused by mega mergers, etc.? And why not studies on what really big banks are doing? Or not doing? So if sill another NCRC study out of the blue turned out to again be much ado about nothing, why give it any attention, or even be slightly concerned about it? Because there are so many attacks on credit unions coming from so many different quarters on such a regular basis that all of them must be taken seriously. It is impossible to know which one, no matter how far out, might just stick for whatever reason and get legs. Each and every threat to the ability of credit unions being able to serve their members must be challenged and nipped in the bud. And it has to be done like the latest NCRC attack, by setting the record straight with facts, not emotion, and enlisting the aid of strong and knowledgeable credit union supporters. This scenario is precisely why all the state and national credit union trade groups need the support of all credit unions to do their main job, credit union advocacy. Every attack on credit unions, by whatever group or individual, whether it be size specific such as “those over $10 million,” or “those over $100 million,” or those “over a billion in assets,” is in reality an attack on all credit unions and their 87 million members. 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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