Utah Legislature In the Dark About Credit Union Difference

I was sitting in the Utah State Capitol building late Thursday morning February 13 waiting for some action on House Bill 162 when the lights started flickering. It turns out the power outage was quite widespread, impacting a large portion of the Salt Lake valley. So the lawmakers were left in the dark. How appropriate, but I would add that they have been in the dark for a quite while now, due to the heavy blanket of misinformation draped over the Capitol by the Utah Bankers Association. Over the course of the past month, a vicious fight has spilled from inside the dark-stained walls of the Utah State Legislature. Utah’s banking community has launched another unprovoked attack against Utah’s credit unions, and once again, the assault is brutal. It started on January 20 when House Bill 162 was introduced to the Utah State House. The bill sponsor is Jeff Alexander, however the real power behind the bill appears to be the Speaker of the House himself, Marty Stephens, a banker himself – he’s a Vice President at Zions Bank. It became clear early on that the bill was fast-tracked. Two attempts to move the bill out of Rules proved fruitless, so Committee Chair Marda Dilree moved it herself without a third committee vote. By January 23, the bill was assigned to the House Business and Labor committee, a committee stacked with banker-friendly legislators. While in committee, they did allow the perfunctory testimony from credit union advocates. Some minor amendments were made. But it was obvious that the minds of most of the committee members were made up long before any of the credit union supporters opened our mouths. The bill was out of committee on February 5 in a vote of 9 to 4 in favor. On February 6, it was already on the House floor for discussion and possible vote. It has sat on the house floor until today, February 14 with little action being taken. As of time of press, the bill has been sent to the Senate after passing in the House on Monday February 17 by a vote of 43 to 32. If enacted, HB 162 would assess a 5% corporate income tax on Utah’s credit unions, as well as a “competitive equity fee” (really punitive measures for being successful) of 30% of retained earnings for credit unions with above $100 million in assets and branches in more than one county. Curiously, only three institutions qualify under the stipulations: Utah’s two largest credit unions and Goldenwest. It could be theorized that the bankers were just looking for that one common trait to bring down financially successful credit unions. The amount of energy from credit union supporters to combat this proposed legislation has been the one thing of encouragement throughout the process. Answering the rallying call from the Utah League, large groups of Goldenwest employees have made the trip down to the Capitol to show their support by sitting-in on the testimony before the Business and Finance Committee. On those occasions, every spare seat in the auditorium was taken, and many people were standing both inside and outside of the room. From what I have observed, it is so obvious to me that the support is not limited to credit union insiders and employees. The people of Utah want this legislation defeated. Velma Saunders, 93-years old, made the journey south to the Capitol very early one morning in support of the cause. She testified before the Business and Labor committee, “My dream is [that] banks [should] take care of their own business, and let credit unions take care of their own.” She went on to say that “credit unions are for the people.” We had the honor of sitting before the editorial board of the Standard-Examiner, our local area newspaper for an interview on the issue. The reporters and editor let us know that the letters to the editor that they were receiving were running nine to one in favor of credit unions. The pro-bank correspondence has generally been in the form of pre-printed postcards, but the pro-credit union communications are usually personally written letters, once again, this shows the personal interest in the issue. I have personally received numerous phone calls from members. In the beginning they didn’t understand the issues, and wanted clarification. Once I was able to explain to them exactly what this law would mean to them personally, most of the members ended the phone call pumped-up and ready to fight the battle along with us. Now the phone calls are calls are mostly of support – they seem to really understand the issues. Is it “do as I say”, or “do as I vote”? One of the high points of this debate so far has been the appearance at Utah League-sponsored press conference by the esteemed Grover Norquist, Executive Director of Americans for Tax Reform. Mr. Norquist was recently described by Time magazine as the architect of President Bush’s tax-cut plan. He eloquently outlined the backlash to the people of Utah should HB 162 be enacted. He then went on to strongly reprimand Utah’s so-called fiscally conservative legislators for sponsoring this legislation with its new taxes and regulation. These legislators campaigned and won their seats to the Utah State House by touting that they are fiscally conservative. But their support of this legislation is not reflective of those supposedly held beliefs. How is that representing the people that sent them to the House? All people have to do is watch the television or listen to the radio for a few minutes to know that there’s a controversial bill in the Legislature. The media coverage has been incredibly heavy, as have the number of advertisements from both sides of the fence. But the Utah Bankers’ Association (UBA)-sponsored advertisements have had an unusual side effect. I don’t think the UBA realizes their negative ads are reminding the public that credit unions have the best deal in town. Our deposits jumped $7 million in January and are coming in at the same level for February. January is usually a slow month for loans and we saw an unheard of increase noting also the UBA assault has fired up employees and members who are truly passionate about protecting their credit union. One of our call center employees was particularly “in the zone” last week. She was assisting a member with a credit card issue, and was in the process of transferring the member to the credit card company and stated, “I’ll transfer you to your legislator, I mean the credit card service center!” We had a good laugh about that, but it proved to me once again how strong the passions on this subject. I’m not sure how this will end. But I do know that with an 83% credit union approval rating from the great people of Utah, a strong message has been sent to the State Capitol. For now, we need to keep that courage to resist compromise with the bankers on this issue. We already have, and must continue to send the message to our legislators to vote NO on HB 162.