Talk Radio Airs Utah Credit Union/Bank Tax Fight

SALT LAKE CITY – Talk radio has became the newest battleground for Utah’s contentious bank-credit union dispute with a new focus: bank branch closings in small towns. The issue and the rhetoric on KSL-AM, the state’s leading talk station, came to the fore after Wells Fargo Bank in separate moves closed two branches in Eureka and Altamont. Replacing the Wells Fargo branch in Eureka, population 800 with a credit union facility on the site effective Jan. 21 is Mountain High Federal Credit Union of Spanish Fork. The move by Mountain High FCU drew high praise from civic leaders who lamented the loss of banking service in the historic mining community for the first time in 100 years. Eureka is also the hometown of KSL talk show host Doug Wright who invited CU representatives and later those from the Utah Bankers Association in two hour long shows to discuss branch closings and CU expansion. In the phone-in format, UBA officials quickly brought up the tax exempt status of Utah CUs. They maintained Wells Fargo would not have closed the branches had it received the same “tax advantages” enjoyed by CUs. Countering the UBA’s claims on the radio and in media coverage of the Eureka closing were Scott Earl, the president of the Utah League of Credit Unions, joined by Dennis Dunn, the president of the $10-million Mountain High, which converted to federal charter in September so it could expand into neighboring Juab County where Eureka is located. In November Mountain High also opened a branch in Nephi, also in Juab County, and “we would open in Altamont, too, but we’ll await whatever decision Mountain America Credit Union makes on that,” said Dunn in a reference to Mountain America CU of Salt Lake City which has been invited by local leaders in the tiny hamlet to fill the void left by Wells Fargo. Dunn explained to KSL listeners the differences between state and federal charters noting that his institution, until it converted, could not fully serve “the underserved” in communities like Eureka and Altamont. “This is something that Dennis Dollar has called for in his Access Across America proposals to serve the underserved,” said Dunn referring to the NCUA Chairman. With a membership of 3,000, Mountain High, he noted, also plans “by the end of this quarter” to add a fourth branch in Payson, 10 miles south of Spanish Fork and which has several bank branches, “but no credit union with an open field of membership.” Executives at many banks and CUs across the state-as well as in League and BA offices-have been busy listening to the talk show station which first broadcast the Eureka case on Jan. 2 and then twice more on Jan. 6-7. Also joining the media discussion was the state’s commissioner of financial institutions, G. Edward Leary, who also noted the ease of federal CUs to branch in the state but on a separate matter has taken a hands-off approach to an appeal by the League to crack down on “derogatory comments” from bankers in the press which injure the “safety and soundness” of CUs. Leary said he is “sensitive to the concerns of the League,” but the level of criticism “has not reached a threshold” where legal enforcement of the banking code is required. “I do think both sides should cool their rhetoric” for the sake of financial institution stability, he said. But the talk show debate underscored the intensity of emotion on both sides as the Utah Legislature prepares to take up the tax-exempt issue being put forward by banks claiming a tax on CUs would help the state’s budget crunch and a severe shortfall in school funding. Regarding the Altamont closing, Fred Nydegger, senior vice president of government relations for the $1.07 billion Mountain America CU, said his CU has no plans to convert to a federal charter to branch into Altamont but would be willing to help out residents of the community of 300 with financial services. Wells Fargo, citing poor economic returns from both Altamont and Eureka, has said it will close its grocery store facility in Altamont in February. Altamont is located in far eastern Utah near the Colorado border. “I’m not sure what kind of pressure the commissioner might get on this, but we might be willing to set up a SEG in Altamont perhaps tied to the Chamber of Commerce,” said Nydegger. “I’m not sure if something could be worked out with the commissioner.” Meanwhile, the town clerk of Altamont complained in local press accounts of the “devastating”impact on residents “who will have to drive 22 miles to Roosevelt to bank.” Mountain America has a branch in Roosevelt. Similarly, the mayor of Eureka, Lloyd Conder, said he was grateful to Mountain High FCU for opening at the Wells Fargo site since “it’s been a pain in the butt to drive 40 miles every time you needed to go to the bank.” -