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LAS VEGAS – The Nevada rhetoric between banks and credit unions over the tax exemption, “mega” CUs and what’s happening to SBA loans is heating up again this month with both sides claiming false statements appearing in a statewide business journal. Delighting the Nevada Credit Union League were comments attributed to two leading bank CEOs that the continuing attack on CUs was pointless and a waste of time since the large membership base of CUs hold greater sway with Congress. But the chief anti-CU antagonist, William Martin, chairman, president and CEO of the $3.4 billion Nevada State Bank -the state’s largest – countered that the idea that Congress would be influenced by CU members is mythical and is duping his banker friends describing them as misinformed. “I can’t help it if some are defeatist,” said Martin who for years has ardently challenged CUs in the local media for not paying taxes while expanding into business lending and gaining in asset size. He told Credit Union Times his boss, Harris Simmons, the chairman of Zions Bancorporation of Utah, recently sent him copies of a credit union ad “banner” headlined “The Future of Banking.” “That kind of thing says it all-credit unions won’t be happy until they have every banking power,” snapped Martin, whose bank is an affiliate of Salt Lake-based Zions. Simmons, who takes over late next month as chairman of the American Bankers Association, is a fierce foe of CUs in Utah and the architect of the successful 2003 law curtailing business loans for state-chartered CUs which nearly taxed CUs but also triggered a conversion tide to the federal charter. Simmons was also behind the ABA/Utah Bankers Association suit brought against NCUA in which a federal judge in Salt Lake in December 2004 struck down a six-county expansion for a group of large Utah CUs. In Nevada all of the over-heated exchange among banks and CU leaders in the state League and the Nevada Bankers Association is triggered by two banker and CU “Roundtable” articles appearing in May and July in the Nevada Business Journal. The publication printed verbatim Q&A comments from some of the nine top CU executives and an identical format with a dozen participating bankers with both sides since then picking up individual quotes as part of the back-and-forth slugfest. One banker quote which brought the ire of CUs and was attributed to Ed Jamison, president/CEO of Community Bank of Nevada. He claimed Nevada CUs are destroying the preferred lender market for SBA loans by “giving away rates” and refusing to sell the paper in the secondary market. Calling the claim absurd, Bradley W. Beal, president/CEO of the $825 million Nevada FCU, said he found it “rather remarkable and conspicuous that the bankers seem to be so ill-informed” about the tiny share of SBA loans held by Nevada CUs. Even if true, “we are hardly cornering the SBA market,” said Beal who also found it interesting that Nevada banks are throwing up what he said was a competition smokescreen while earning huge profits. Indeed, one of the participating CEOs in the banker Roundtable is Barry L. Hulin, representing Valley Bank, which posted a record 90% jump in earnings for the first six months of 2005. These same community banks, said Beal, engage in frivolous CU attacks and then turn around and make a stock killing by selling out to large out-of-state institutions which continue to enlarge their share of the Nevada banking market. But Martin of Nevada State said he remains “more outraged than ever” after reading a claim in the CU “Roundtable” edition in May in which CU executives were quoted as saying CU assets are $4 billion in Nevada as compared to $866 billion for banks including Bank of America and Wells Fargo. Martin said the figure is closer to $25 billion making the $866 billion claim “ridiculous.” Also “foolish,” he said, are claims that Nevada banks “asked” for a branch tax two years ago during a state budget crisis. “How can you make such an uninformed ill-conceived statement?” asked Martin. Regarding SBA, another Roundtable banker, James Howard, CEO of the $75 million Desert Community Bank, observed “mega-credit unions are getting fairly sophisticated in what they’re doing, but the medium-sized or smaller credit unions don’t have the expertise in commercial lending and they’re going to start failing.” When that happens, “they might obtain enough notoriety to get a bad reputation,” forecast Howard. Beal of Nevada FCU said just whether or if the League might counter the banker statements through a media campaign was uncertain for the time being. Siding against that strategy was what some CU execs said was a surprising revelation in the July Roundtable quoting two participants as dismissing the anti-CU diatribe as the work of a small group within ABA, perhaps meaning Simmons of Utah. “They may be referring to me,” conceded Martin of Nevada State. One of the bankers quoted was Hulin of Valley Bank who said he was “amazed bankers spend so much time worrying about credit unions. It is so irrelevant to what most of us do on a day-to-day basis.” Hulin went on to suggest the pro-CU attitudes in Congress are hard to change contending “there are tens of millions of members of credit unions.” “The ABA has one guy who spends his whole life fighting credit unions,” said Hulin. “I don’t get it.” Then Larry Woodrum, president/CEO of BankWest of Nevada, chirped in, “I don’t either.” On what officials of the Nevada League claim is a curious note, Martin though by far the most vocal banker, did not participate in the Banker Roundtable and had cancelled an original “debate” planned by the publication last spring leading to suggestions that the Las Vegas bank CEO was avoiding confronting CUs or was “hiding.” Laughing, Martin said he had to undergo a physical on debate day, but “I would not think” of avoiding a head-to-head against Nevada CU leaders. Indeed, he said he would relish the chance. [email protected]

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