Banking Groups Are Fighting a Losing Battle

Although none of the banking trade associations have asked for my opinions in connection with their ongoing battle against credit unions, I’m going to give them anyway. In my opinion, the state and national banking trade groups’ attempts to put all but the smallest credit unions out of business is a lost cause. They can’t win this fight and deep down they know it. The evidence is everywhere and keeps mounting. The banking industry’s collective anti-credit union track record over the past two dozen years clearly shows that despite all the money, all the rhetoric, all the tactics, the banking industry’s successes against credit unions can still be counted on one hand. Everything negative that can be said by the banking industry lobbyists has been said. Yet credit unions keep growing in assets and members. All the banking association money earmarked to attack credit unions could be better spent on real issues, issues that actually do affect the safety and soundness and potential for growth for banks. Fact is, for most banks, at least those with the most assets and customers, the credit union issue is a non-issue. There are multiple reasons for the banking industry’s consistent lack of success against credit unions. But no one, even most credit union leaders, ever talks about the primary reason. It’s one which astute lawmakers fortunately understand. It is the answer to every outrageous charge banking groups make against CUs. It boils down to the simple realization that from the first salvo fired by banking lobbyists many years ago, they have never been able to demonstrate that credit union successes have caused harm to the banking industry. Year in and year out, a long list of very impressive banking industry statistics proves that point. Yet, the banking industry trade groups expect their members, lawmakers, courts, and even consumers to believe that banks would be so much better off if credit unions were stripped of their not-for-profit, tax-exempt status and forced to play on a banking industry defined “level playing field.” It simply wouldn’t matter! Carried to the banking associations ultimate conclusion, banking would be so much better off if large credit unions converted to bank charters, or better yet, disappeared off the face of the planet. Really? Historical facts don’t support that contention even though without credit unions in the marketplace, banks would have a field day with even higher fees and rates. It wouldn’t take long for the new slogan from the Independent Community Bankers of America (ICBA), “Enough is Enough,” to become the new rallying cry for consumer groups fed up with mega mergers, mega banks, mega fees, mega staff layoffs, mega executive compensation packages, and mega stock deals. Who benefits from credit unions? About 85 million U.S. citizens. Who is getting hurt because of credit unions? No one, not even banks. President George W. Bush gets it. So does Democratic hopeful John Kerry. So do the almost 50 (so far) lawmakers who are co-sponsors of the Credit Union Regulatory Improvements Act (H.R. 3579). So give it up banking trade associations. Cut your losses. History is not on your side. Get on another bandwagon. Support an initiative that could really advance the cause of banking. Quit when you are behind! Until banking trade associations can prove conclusively that credit unions have stymied the tremendous success enjoyed by the banking industry, all the rest of that walking and talking duck stuff, unlevel playing field nonsense, unfair competition whining, expanding FOM malarkey, stick with poor people admonitions, and business loan threats, just don’t have any credibility. Of course there is no way any banking group cares about my opinion. They have no intention of giving up their multi-front attacks on credit unions. But in the heat of battle, they seem to be overlooking the obvious fact that the credit union industry just might also think about adopting the ICBA’s slogan: “Enough is Enough.” Over the years, credit unions took pride in turning the other cheek. No more! At long last, the defense orientated credit union industry is beginning to mount a potent offense. Growing CU PAC Funds and letters to Congress like CUNA CEO Dan Mica sent recently and the on-the-record CU support by influential lawmakers are just the beginning. The success the Utah league just registered in orchestrating the defeat of a major political candidate in the Beehive state who had bank connections and well-known anti-credit union leanings is just the beginning. So is a likely decision in Texas for credit unions to actively oppose a piece of bank friendly proposed legislation for the first time. And can the day be far off when credit union spokespersons will no longer say, when referring to the runaway growth of Sub Chapter S Corporation conversions by banks, “We don’t oppose this seeking of tax breaks” but instead say in plain English, “on behalf of 85 million consumers, we strongly oppose banks seeking this and other ways to avoid paying their fair share of taxes”? Also, watch for more credit union favorable editorial columns and op-ed pieces in the mainstream media to which the banking industry can react with letters to the editor rather than the current vice versa situation. And for more setting-the-record straight advertisements sponsored by CUs. And as even supposedly impartial bank regulators encourage more credit unions to convert to bank charters, don’t expect those numbers to go much higher than they already are thanks in part to the Columbia Credit Union charter conversion expose. As credit unions continue to become a force to be reckoned with and switch to an aggressive “act” mode from their traditional “react” mode, the pressure will intensify on banking trade associations to wise up and throw in the towel. Will they? Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail [email protected].