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In his March 22 column, “Credit Unions Have to Be Ready for Good, Bad or Ugly Publicity,” Editor-in-Chief Paul Gentile makes an excellent point in emphasizing the need to engage the media when it is writing about credit unions, especially given bankers’ stepped-up misinformation campaign about credit unions in the press. In the recent front-page Wall Street Journal feature on banks’ objections to credit union competition, it was important for CUNA and credit unions to have a prominent voice in the story, and we did. Still, the Journal article included a number of statements from bankers that we must continue to combat in the media and in policy circles. One particularly egregious example that leapt out at me: In claiming that our tax-exemption gives credit unions a competitive advantage, Zions Bancorp CEO Harris Simmons blithely brushes aside his own bank’s record profits ($480 million last year) and rising stock price (up 38% in two years) by saying it’s simply a matter of fairness. The average Wall Street Journal reader may be less concerned about the structural differences between for-profit banks and not-for-profit credit unions that account for the fairness of our tax status. But I believe the article’s discussion of the effects of credit unions in the marketplace will prompt the Journal’s readership to ask themselves this important question: If Mr. Simmons’s and the banking lobby’s determination to “rein in” credit unions were to succeed, who really would be better off? It wouldn’t be consumers, who as the Journal article makes clear, generally receive more attractive pricing from credit unions than they do from banks. By our estimation, the benefit to members of using a credit union rather than a bank amounts to more than $6.3 billion a year. Further, studies show bank customers save $4.2 billion a year because of the presence of credit unions in the marketplace-another variation of the “brake” that credit unions apply on the throttle of excessive bank pricing noted in the article by Utah League of Credit Unions President Scott Simpson. In total, then, credit unions are putting more than $10 billion a year back into the pockets of consumers-far exceeding the value of our tax-exemption. (Indeed, press reports have even chronicled Harris Simmons’s own Zions Bancorp complaining to investors that it had to move its savings rates up a notch because of credit unions. We heard no such complaints from Zions’ customers!) Nor would small business borrowers be better off if Mr. Simmons has his way. As we see time and again, credit unions often make the small-sized loans that do not interest commercial banks. The average credit union small business loan is only about $150,000. Our prudence in making these loans has been noted by the U.S. Treasury, and our role in this market has been lauded by the U.S. Small Business Administration. In general, the public is well served by having many sectors in the marketplace, profit and not-for-profit. It would be a great loss to the nation if the credit union choice were to be eliminated. Indeed the only ones who would be better off would be the banks and S&Ls, whose string of record profitability (14 out of the past 15 years) and dominance among depository institutions (94% market share in general, 99% of the commercial lending market, and total assets of $11 trillion compared to credit unions’ $700 billion) would become even more pronounced absent the check and balance provided by credit unions. The Journal’s reporter should have asked Mr. Simmons what is fair about that. Juri Valdov Chairman, CUNA Board of Directors CEO, Northwest Federal Credit Union Herndon, Va.

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