SAN DIEGO – Despite successes in fending off attacks by the banking industry in state legislatures this year, credit unions need to be prepared to "stop them cold" in the future or face dire consequences, the head of the California/Nevada Credit Union League has warned. "If they (bankers) really get cracking, if they really get a big win in any state, then they will be emboldened to take us on in other states and will have momentum that will be hard to stop," said David L. Chatfield, league president and chief executive officer. Chatfield's comments came at the league's annual meeting and convention Tuesday (Nov. 18) during an update and open forum on league activities, particularly in the area of political advocacy. Some of the session was closed to the media. But Chatfield left no doubt that he sees more attempts by the American Bankers Association and its state associations to seek legislation that would tax or impose restrictions on credit unions. "We've seen an unprecedented level of attacks by the banking industry on credit unions," he said. "We can expect the anti-credit union crusade to last and continue." He added that in his nearly 39 years of involvement with the credit union industry, the attacks by the banking industry have "never been as vicious and persistent as it is right now." He said he expected about 10 states to be "under banker attack" this year and next. He cited efforts launched in Utah, New Mexico, Iowa, Oregon and California and Nevada. "And they have their sights set on a number of other states as well," he said, warning that every state could potentially be at risk. "If that smelly camel ever gets its nose under the tent, it won't be long before the whole stinkin' thing is in there and they're after all of us, not just some of us," he said. Chatfield called the assaults by the banking industry part of a coordinated national strategy, not a grassroots effort by individual state banking associations. "In each state the strategy seems to be the same, and so is the legislation they manage to get introduced," he said. "Clearly they have an ongoing national effort, an ongoing national campaign, and we need to stop them cold." The banking industry's mission, he said quoting from an ABA committee document, is "to lead the fight against aggressive growth-oriented credit unions with the goal of introducing legislation to tax credit unions like banks." "It's obviously a continuation of their old, tired, worn out divide-and-conquer strategy," he said. "They have tried to pit large credit unions against small credit unions. They have tried to pit state-chartered credit unions against federally chartered credit unions. "Credit union people have shown they're not going to fall for that," he added. The banking industry has long contended that credit unions are just like other depository institutions but "continue to be afforded special treatment – including exemption from federal taxation and from regulatory responsibilities that apply to commercial banks. . . " Chatfield said the bankers' strategy has shifted focus and was now honing in on the budget crisis that many states, including California, are facing. " They are now trying to use the budget crises in 36 states to provide them with the political ammunition – as a cover to attack our tax exemption and to propose other restrictions – and to really try to pick us off state by state," he said. In its latest attack, ABA senior economist Keith Leggett suggested that bankers should go to Congress to complain about the "Taj Mahals" that he claimed credit unions were building. "Let's highlight the grand offices being constructed by the credit union empire builders," Leggett wrote in a Nov. 11 editorial in Bankers News. "Let's particularly inform those in Congress that these institutions are not mom-and-pop operations; they are self-aggrandizing, large tax-free banks masquerading as credit unions." Chatfield told those attending the convention that it was vital for everyone, particularly at the state level, to become involved in political advocacy efforts. "If you're part of a credit union, whether you're a volunteer or a professional in a credit union, part of your job is to make sure you and your credit union are involved in political advocacy and grass roots work," he said. -

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