LAKE JACKSON, Texas — Texas Dow Employees Credit Union's safe and sound advertising campaign may have created too much buzz.
Last month TDECU launched a public education campaign to spread the word about the soundness and stability of the credit union industry. The message revolves around the simple concept that money and investments are safe–if trusted to credit unions.
FDIC General Counsel Sara A. Kelsey has written a letter of concern about the campaign to both the NCUA and the Texas Credit Union Commissioner.
"I am writing to express the FDIC's concern about misleading statements regarding the banking industry that Texas Dow Employees Credit Union has posted on its Web site and run in radio, television and newspaper advertisements," Kelsey wrote in the letter. "The Web page begins by saying 'The news is scary,' then talks about the 'crisis' in the financial services industry and goes on to say that 'The entire banking and mortgage industry is under a dark cloud.' In contrast, the Web page explains that TDECU does not get into the kind of trouble the banking and mortgage industry is in. Therefore, according to the Web page 'deposits with TDECU are safe. And sound.' The clear implication from this statement is that deposits with banks are not safe and sound."
She added that "by casting aspersions on the health of the banking industry and implying that bank deposits are not safe and sound, TDECU has made irresponsible and misleading statement that could generate unwarranted public anxiety. Such statements may violate both federal and state laws, including the Federal Trade Commission Act and Texas deceptive trade practices laws."
Texas Credit Union Commissioner Harold Feeney agreed with certain elements of the FDIC's concerns, according to a subsequent letter he sent to Texas Dow Employees CU.
"While it is entirely appropriate to be an advocate of the strengths of your products and services, we believe that any form of advertising that implies that insured funds may be more or less safe depending on where they are deposited is inappropriate and, in some cases, represents a violation of federal and state law," stated Feeney in a letter to TDECU President/CEO Ed Speed.
"Whether we like it or not, we must face the fact that public confidence is the cornerstone of the financial system. Maintaining this confidence is the responsibility, and should be the utmost priority of all financial institutions as well as this agency. Comparing the relative strengths of institutions is subjective and is frequently based on only a few criteria that fail to represent and institution's overall performance. Furthermore, claims of superiority evoke counter productive rebuttal comparisons and serve to deteriorate the public's confidence in the deposit insurance system," added Feeney.
The commissioner further requested that TDECU "delete any references on your Web site or in any future media advertisements that could imply that deposits in banks are not as safe as deposits in credit unions. In addition, please cease activities that may foster public alarm and threaten the stability of the deposit insurance system."
Texas Dow Employees CU CEO Ed Speed agreed to halt the campaign. In his letter responding to the agencies, he wrote, "We are a bit busy preparing to serve members who are about to be devastated by a storm of incredible strength."
"However, this e-mail is the official response of TDECU to your communication just this morning directing TDECU to cease advertising as outlined in your letter, a copy of which is attached."
"TDECU will immediately cease the advertising as you describe in your letter."
However, he added, "our compliance with your directive in no way implies that TDECU agrees that our advertising is in any way whatsoever incorrect, misleading, illegal or otherwise inappropriate."
"Given the recent federal takeover of both Fannie Mae and Freddie Mac, we believe our messages are correct, truthful and provide a valuable public service."
Created to inform and educate the public, the safe and sound multimedia campaign was aimed at generating discussion and providing a voice to consumers who are concerned about their financial future, the credit union said.
The campaign comprises television commercials, newspaper ads and radio spots and is supported by a community outreach effort. It also includes a Web site (www.TDECUsafeandsound.org) as a resource for consumers to gather information to help them to make smarter decisions about their money while understanding the differences between banks and credit unions. The site also gives consumers an opportunity to discuss the issues and learn more about TDECU.
–mdigiovanni@cutimes.com
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.