American Bankers AssociationPresident/CEO Frank Keating stirred up the credit union faithfulrecently with a new spin on the tired credit union tax exemptionfight.

In his June 23 opinion piece published in Washington politicalpaper The Hill, Keating argued that the proposed PlayersChoice Federal Credit Union, which applied for an NCUA charter,runs afoul of the Federal Credit Union Act because the creditunion's proposed pro athlete field of membership does not fit intothe modest means category.

That argument makes for a great sound bite, but Keating needs toread the FCUA more closely before he makes such grandiose claims ofstatutory violation.

In the law, the term modest means is only mentioned twice; andeven then, only in the footnotes.

The first mention of the term is a history lesson: “The Americancredit union movement began as a cooperative effort to serve theproductive and provident credit needs of individuals of modestmeans.”

The second mention inches a little closer to Keating's argument,but ultimately comes up short.

“Credit unions … are exempt from federal and most state taxesbecause they are member-owned, democratically operated,not-for-profit organizations generally managed by volunteer boardsof directors and because they have the specified mission of meetingthe credit and savings needs of consumers, especially persons ofmodest means,” it reads.

Now, I'm no lawyer, but there's a distinct difference betweenespecially and exclusively.

Nowhere in the FCUA does it say credit unions can only serveconsumers of modest means. The ability to participate isn't a rightreserved only for the poor.

Keating's opening line shows his ignorance on this point.

“Would you believe that multimillionaire basketball stars TimDuncan and LeBron James could soon be eligible for taxpayersubsidies intended for low-income Americans?” he wrote.

News flash, Frank: LeBron, Tim and the rest are probably alreadyeligible to join a credit union as residents of their communities,and possibly even as employees of their respective organizations.They might even already be credit union members.

For me, this issue hits close to home. The two credit unions atwhich I've worked both served members who were not primarily ofmodest means. Many earned six-figure salaries.

It's pretty ironic a Republican like Keating would advocatedenying the upper middle class such a basic right. Of course, itwould work in the bankers' favor if those above the poverty linecould only open bank accounts.

I'm not sure from where Keating sourced his statement thatnearly half of credit union members are upper-income. Perhaps he'sarguing that the millions of enlisted men and women who belong toNavy Federal, PenFed and other military-based credit unions areoverpaid. Or maybe the 2 million members of State Employees' CreditUnion are living secret lives of luxury in North Carolina. The nexttime I travel to Seattle, perhaps I'll notice BECU members sportingsolid gold rims on their sensible Subaru Outbacks.

Now, it's fun to pick on the bankers, especially when they presssuch an absurd argument. But there is also an opportunity here forcredit unions to move beyond it.

The banking lobby is able to use the modest means argument inpart because whenever the tax exemption is threatened, creditunions parade their tired, poor, huddled masses beforeCongress.

Serving the poor is a noble effort, and as cooperative financialinstitutions that serve all communities, credit unions shouldabsolutely do so. They should be proud of it, and there's no reasonnot to use those efforts in lobbying.

However, modest means isn't the reason credit unions get thattax exemption; it's their not-for-profit, cooperativestructure.

The trades do push this point on Capitol Hill. But it shouldhave equal if not greater emphasis than the modest-means pitch.

Credit unions aren't for poor Americans. They're for allAmericans.

Additionally, credit unions should be more aggressive in sellingcooperative structure as the primary benefit of membership. Somecredit unions do this very well, but most avoid it altogether.

That's foolish, not only in terms of political sustainability,but in attracting Gen Y, who we know value ethics as much asprice.

Heather Anderson is executive editor of CU Times. She can bereached at [email protected].