From the April 9, 1990, issue of Credit Union Times.

WASHINGTON, D.C. – “If you can't beat 'em, join 'em ” might well be the subtitle of the final chapter of the just released study of credit unions by the American Bankers Association.

After spending more than 200 pages criticizing many aspects of credit unions' organization and operation, the study devotes its final pages to strategies for bankers to compete with CUs. It's a ringing endorsement of the personal service and convenience that CUs claim is the reason for their popularity. The study also includes praise for the NCUSIF.

The chapter includes ideas on providing quality service, developing strong customer relationships and a sense of belonging, and encouraging and promoting direct deposit. On pricing of services, the study recommends bankers look specifically at transaction accounts and possibly venture into offering truncated checks with lower fees to attract customers used to doing business with credit unions.

The study entitled “The Credit Union Industry: Trends, Structure and Competitiveness” explores the structure of CU movement, membership demographics, products, services, supervision, regulation, the common bond and taxation.

The study portrays credit unions as fast growing,  expansive financial institutions that have strayed from their origins and serve a membership of predominantly educated, high-income consumers. The study not only supports the bankers' call for taxation of CUs, but it also raises issue with the sponsor subsidies many CUs enjoy. “…The credit union tax exemption is only one of many elements in the competitive equation linking banks and credit unions. Even after its removal credit unions will still be able to tap the advantage of their past tax-free status, lower overhead expenses, and freedom to offer a wider variety of products…” it concludes.

Commissioned by the ABA at a cost in the “six figures,” the study was done by the Secura Group, a Washington, DC-based consulting firm headed by former FDIC Chairman Bill Isaacs. Many of those working on the study have former ties to the banking industry, which has lead credit union groups to roundly dismiss the impact it will have in Washington.

While critical of common bond expansion and the tax-free status of credit unions, the study does have some positive things to say about the health of the CU movement and its insurance fund, claiming the fund and CUs are in “relatively good health.”