Nevada CUs, Stung by Banker Rhetoric, Try to Counter Publication Bias

LAS VEGAS – Nevada credit unions are grappling this month with an anti-credit union media problem – one “obviously engineered” by the American Bankers Association’s incoming chairman and Utah antagonist Harris Simmons, according to Tony Mook, the chairman of the Nevada Credit Union League. “Just like Gepetto is the master of Pinocchio as one of his puppets, so does Harris Simmons do the same for Bill Martin out here in Nevada,” said Mook referring to William Martin, also a CU-antagonist and the CEO of Nevada’s fourth largest bank and an affiliate of Zion Bancorp of Salt Lake. Mook, who also is president of Cumorah CU here, is accusing Martin, chairman of Nevada State Bank, of helping engender a flap with the monthly Nevada Business Journal which for months has been running articles with an anti-CU tone climaxing in harsh rhetoric from a “Bankers Roundtable” issue July 13. The Nevada League, working in part through its California Credit Union League managing partner, has accused the publisher and editor of the Business Journal of being one-sided in editorial coverage and has demanded equal time. The editor, Kathleen Foley, has denied being biased toward banks and insists CUs will be given a chance to tell their story “verbatim just as we have done for banks” in a future issue. One means of doing that, she said, is to have a “private” CU/banker debate over taxation and other topics to be held on the premises of the publication with the quotes printed in an issue of the publication. But two weeks ago the debate scheduling fell apart “after Bill Martin, one of the participants, had to call off an Aug. 4 date because of medical tests he had to take in California,” said Foley. “We hope Bill Martin’s medical problems are not serious,” said Mook, “but we are keenly disappointed that a positive message about credit unions” is not appearing in the Business Journal to counter the `ridiculous’ claims made July 13 as well as in back issues.” One charge in the issue attributed to a team led by Martin and other CEOs of Nevada community banks is that CU growth in the state particularly by the “mega financial service” CUs has reached such levels that bank profits are being hurt and banks “will start moving out of state.” Moreover, the move by CUs into business loans is dangerous “for their solvency” since CUs “are not held to the same regulatory standards” as banks. Moreover, CUs “pay no tax whatever” and elected officials are “running scared” of CU letter-writing membership campaigns though CU lobbying power is overrated. Mook and others in the Nevada/California Leagues maintain they will have no problem countering the banker claims in a debate considering “the credit union position will shine since we have an important consumer story to tell.” But Mook said he found it curious that another banker participant in the debate, Kirk Clausen, Nevada regional president of San Francisco-based Wells Fargo, also bowed out for now since “he didn’t want to be there without Bill Martin.” That, said Mook, looks to be another sign of the Martin/Zions influence in pushing the ABA anti-CU agenda in Nevada. “We’ve been working long and hard to get this thing together with the Journal to make sure our story gets told,” said Mook, and now there is another postponement. The publication has promised “to have court reporters there” and “maybe that’s why the bankers are reluctant to take part since “their statements will be in print word for word.” On a personal level, Mook said both his wife and Clausen’s are both members of the same Las Vegas quilting bee and “agreed not to talk about” the CU/ bank fight because “feelings run deep.” “I know Kirk Clausen and he is a good guy,” laughed Mook, but as the clash heats up maybe it might not be a good idea to be around those wives “should those quilting needles ever come out.” Meanwhile, Dennis Flannigan of Reno, the chairman of the Nevada League’s government relations committee and who will join Mook as a debate panelist, said he is also a bit discouraged by the debate delay but hardly undaunted as he said Nevada CUs will have no difficulty correcting one-sided statements. “This is a publication that is simply dominated by banker advertisements and they don’t want to do anything to disrupt that business relationship,” said Flannigan, who also is executive vice president of Great Basin FCU. Flannigan and other Nevada CU executives point out that the attack on CUs follows recently-enacted new revenue-generating laws which tax bank branches and impose a franchise tax. Nevada banks have even asked CUs to join them in the legislature to remove the branch tax during next year’s session “but we have decided to stay neutral on that one,” said a spokesman. Regarding the Business Journal, Foley said she would have to consult with her publisher, Connie Brennan, about a new date for the debate. She said there was no telling when all sides could be there, “but hopefully it can be held in the next few months.” She acknowledged that being in the cross-fires of the bank/CU clash is something that “comes with the territory” and that she understands the CU position. She said she was reminded that both banks and CUs have powerful national trade associations behind them. Still, she noted that she has received phone calls and e-mails from irate CU leaders adding, “I got an e-mail which said we should change the name of the publication to Nevada Banking Journal.” Foley said her publication “is willing to print verbatim the credit union position as we have done for bankers.” Like other industries featured in its pages, “the banking industry is important” in the state and therefore is due a voice on issues “as it sees them” – [email protected]