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WASHINGTON – There are some conflicting points of view around Washington over whether the credit union philosophy is alive and well and what that even is. From behind the corner office desks of the two national credit union trade associations, credit unions are doing a fine job of serving their members and operating the “people helping people” way. “I think the credit union philosophy is alive and kicking,” NAFCU President and CEO Fred Becker stated. “As we go forward, we’re wrestling with our exemplary safety and soundness.and how that might balance with what we might want to do in the future.” Like taking more risk, he explained, and better serving the members. Becker said he wants credit unions to move away from goals like a CAMEL 1 rating or a higher return on assets to more member results oriented. If you give a credit union CEO a goal of a 1% ROA, that is what they will produce. “We have to balance against that to do more to help riskier people,” he said. Becker recently spoke to a group of credit union officials in Louisiana on this subject. “I think they’re receptive to it.But I will say that the agency and examiners stick in the back of their heads,” he said. It is great that credit unions have never cost taxpayers a dime and they should not, but they can still take on more risk. “This is an aircraft carrier,” Becker said, making an analogy to his Navy days, “and you don’t change its direction overnight.” He added that he is not sure what NCUA’s data collection efforts are going to show, but he feels the results may not accurately reflect credit union service to those of modest means. Becker said credit unions are serving their members well, “but given how well they’re doing economically, there’s clearly room to do more.” Concerning credit unions living their philosophy, CUNA President and CEO Dan Mica commented, “Maybe the biggest problem in the credit union movement is we do so much it is hard to point to everything.” He pointed to programs that CUNA is participating in like the National Endowment for Financial Education, which brings no money into the organization, but arms young consumers with financial education for the future. Every spring, credit unions sponsor the Cherry Blossom 10-Mile Run in Washington, D.C., which has raised more than $1 million for Children’s Miracle Network over the years. The World Council of Credit Unions works to bring micro-lending to economically depressed nations like Afghanistan and has introduced the credit union philosophy and democracy to former Soviet Bloc countries. Mica singled out people like State Employees Credit Union CEO Jim Blaine, and others, who live and breathe the philosophy of people helping people. The Texas Credit Union League’s “Juntos Avanzamos” encourages credit unions to meet certain standards of providing needed services to Hispanic families, like alternatives to fringe services such as check cashing and wire transfers. Over $1 billion has been committed by over 130 credit unions to the HLPR (Home Loan Payment Relief) Loan program, which offers mortgages 1% below market rates with lower fees, since its inception about eight months ago. One of the most obvious, and impromptu, outpourings of aid from credit unions came during last year’s hurricanes. After Katrina hit, CUNA was fielding calls all Labor Day weekend to find out what was needed and who could provide it; calls with offers of aid came in just as fast as calls for help. “We did not have a need brought to our attention that we weren’t able to meet in terms of tangible items,” Mica stated. Military based credit unions are “truly” serving their niche, according to Defense Credit Union Council President Arty Arteaga. “It’s all about people. There’s no question about it,” he said. His members are passionate about what they do-serving the military and their families-he said pointing to Navy Federal Credit Union President and CEO Cutler Dawson and Pentagon Federal Credit Union CEO Frank Pollack all the way down to his smallest members. Credit unions were not founded strictly to serve those of modest means, Arteaga stated, contrary to some points of view. He added that he feels the average person is of modest means anyway. “People will always be people and we just need to stay focused,” he said. When asked about credit unions’ people helping people philosophy, America’s Community Bankers President and CEO Diane Casey-Landry stated, “I thought it was people helping people of modest means.Obviously, your industry will say I have a tainted view. “I think there are two very distinct industries,” she explained. Casey-Landry continued, “There’s the traditional $10 million, $5 million, $1 million credit unions that were created to serve a small group of people.” Those are still doing a good job of serving their members. However, she added, “Large credit unions by and large are not doing their job” on the backs of the small credit unions and the tax-exemption. Casey-Landry challenged she would put a $100 million bank against a $100 million credit union any day as far as what they give back to the community. She said credit unions should have Community Reinvestment Act obligations in order to fulfill their philosophy. Casey-Landry said for example that a credit union serving all of Los Angeles County can pick and choose where to place branches and who to serve, whereas a bank cannot because of CRA. National Community Reinvestment Coalition President John Taylor agreed that CRA would help. NCRC sued NCUA in the past for repealing the Community Action Plan, which had been advanced by then-Board Member Yolanda Wheat under the then-Norm D’Amours administration. The CAP would have required community chartered credit unions to demonstrate how they serve or plan to serve the community adopted. Referring to the credit union philosophy, Taylor said, “I think it’s alive and well” in community development credit unions and credit unions created by employers. However, he added, “With mission creep into other areas.now they actually serve people of higher means.” Taylor said he feels credit unions’ founding fathers are “rolling over in their graves” now. He clarified that he does not oppose credit unions getting into areas like small business lending. “Credit unions should get into any kind of business that helps people of small means, but if they want to be a bank, be a bank,” he said. Taylor said the purpose of the tax-exemption was “to give a leg up because they were supposed to serve people of small means.” He added that he would not suggest that they only should serve people of small means. Evolution is essential to survival, Arteaga commented. “You cannot confuse passion, enthusiasm and commitment to serve and support with change,” he said of credit unions’ detractors. He stated, “There is no way that I would suggest that the philosophy is dying on the vine.” [email protected]

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