Bank Attacks `Like Bad Weeds'; Continue Sprouting State-by-State

LYNCHBURG, Va. – Those bank attacks – from Minnesota to Utah to here in Virginia – continue to pop up on Web sites, in letters to editors, in financial magazines and on op-ed pages across the land, “like so many bad weeds” as one CU executive put it. The moves to confront the assault seem to vary widely. “Let me say that we are not overconfident about this battle, but the League does have a plan in conjunction with CUNA to counterattack these kinds of attacks,” said a spokesman for Rick Pillow, president/CEO of the Virginia Credit Union League, regarding a blistering broadside appearing this month on the Web site of the Virginia Bankers Association. The VBA “action alert” which blasts Virginia CUs for “abusing” common bond field of membership clauses and exacerbating the state’s economic crunch through tax exemption, lays out an aggressive – and apparently sophisticated – e-mail campaign to “encourage” House Ways and Means Chairman William Thomas (R-Calif.) to proceed with his review of the tax exemption issue. Similarly, in Oklahoma, the state bankers organization in its July 19 weekly “OBA Update” again called on bank CEOs to “show up in large numbers” to join a Sept. 19-21 trip to Washington to warn Oklahoma congressmen that CU expansion “is a serious threat to the industry.” In typical fiery rhetoric appearing on the Web site, the OBA warns that, “much like the boll weevil, which thrives on destroying the cotton plant, the morphed credit union industry is doing the same to the banking industry.” The Update, which also describes a “Credit Union Toolkit” containing anti-CU “material” available this month to bankers, boasts of a contest and a “bet” with the North Carolina Bankers Association about how many letters will be generated to oppose the Credit Union Regulatory Improvements Act. “We’re trying to get 50,000 banker letters in Washington by Sept. 1, 2004 and we’re specifically shooting for 5,000 letters from Oklahoma bankers and that’s why we need your help,” said the Web site. “As of today” continued the Web site, “only 1,612 Oklahoma bankers have submitted letters and by comparison North Carolina (with whom we have a bet) has submitted 3,151 letters.” State league government affairs officials in Virginia as well as at CUNA maintain they are well aware of the Web site and newspaper attacks and are preparing CU members with any number of programs to confront the challenge. But like many state league executives, the spokesman for Pillow stressed that strategies being pursued to thwart the attacks are not about to be detailed to the media. In Oklahoma, Bob Bianchini, president/CEO of the Oklahoma League and its chairman, Michael Kloiber, president/CEO of Tinker FCU, have both said Oklahoma CUs are active in letter writing, e-mails and organizing vote drives among employees and volunteers to combat the attacks. However, “every tit-for-tat” charge the bankers make will not always be given a response since, the League claims, the anti-CU campaign led by the American Bankers Association is certain to backfire. Moreover, the grassroots campaign being waged by CUNA and the state Leagues will be fierce, they maintain. Still, the attacks continue. In Minnesota, Kevin Chandler, president/CEO of that League said his organization has been quick to respond with repeated newspaper CU ads citing banker Subchapter S practices following repeated “attack ads” on the tax exemption placed by a Faribault bank. Similarly, Nevada CU executives said they have been wary over “bank influence over a leading state business journal with an apparent banking bias” and are prepping responses to harsh anti-CU rhetoric placed in columns this summer by William Martin, president of a large Reno bank which is an affiliate of Zions Bank of Salt Lake City, whose chairman is slated to take the helm of the ABA next year. Despite the ABA’s best efforts, a sampling of state leagues shows bankers in some locales are simply unfazed by ABA’s Operation Credit Union, considering they have good working ties with CUs. “Look, we’re not about to poke a sleeping bear,” said one League executive who did not want her state identified since there have been scant attacks. But one veteran director of the Virginia League, who asked not to be quoted, said this fight with bankers “is the meanest I’ve ever seen and will be as fierce as the presidential election.” CUNA and League officials repeatedly point out that the battles with bankers rage in states with large community-based CUs like Virginia and Utah. “Look we have Navy Federal and Chartway here, and they have America First out in Salt Lake City,” declared another Virginian. The Virginia Bankers Association “action alert” again hints that banker apathy remains a problem. “Will we fight aggressively or allow the credit unions to continue to abuse their authority and undermine the banking industry and free market? The proof is in the numbers.” The VBA alert lays out a “required text” that bankers are to e-mail to Rep. Thomas of the House Ways Committee and makes suggestions on ensuring the “message” is properly delivered to U.S. Senators and representatives. -