Chuck BruenI recently attended a meeting where a diverse group of credit union officials were talking with a policymaker. The topic of associational fields of membership came up. During that discussion, and in obvious competitive frustration, the CEO of a smaller credit union said, “If these large credit unions want to abuse the FOM system and accept everyone for membership, there is a business model for them and it is called a mutual savings bank. Let them serve everybody, but tax them.”

Perhaps the comment was genuine, but it sounded like it had been lifted directly from the bank trade association’s propaganda playbook and was certainly uttered at the wrong time and in the wrong place. However, I did not want to write this essay to scold the CEO for his misguided outburst, but to question the very basis of his premise concerning FOMs and unfair competition from large credit unions.

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