Blaine Raises Eyebrows with Brothels Remark

WASHINGTON-Reaction was mixed but mostly negative toward State Employees Credit Union President and CEO Jim Blaine’s remarks comparing banks to brothels at CUNA’s 2004 Governmental Affairs Conference. During a debate with then-American Bankers Association Chairman Ken Fergeson, the banker brought up issues like the fact that $1 billion-plus Tinker Federal Credit Union up the street from his bank ($270 million NBanC) had a 30% advantage because of their tax exemption. Blaine’s response was that credit unions grew large (SECU is the second largest in the country) because of their superior service. He also said that banks are like brothels, “You know it’s going to cost an awful lot of money and you know you’re going to get screwed.” The comment brought a mix of chuckles and gasps from the audience, and spawned one of the largest `letter to the editor’ responses Credit Union Times has ever had. Blaine also said that the taxation argument was getting stale while Fergeson argued that larger credit unions should be taxed under Subchapter T (similar to Subchapter S for small banks) like other cooperatives. Blaine was asked to defend credit unions’ marked drop in the American Banker’s annual survey of customer satisfaction and answered that credit unions have taken so many customers from banks, they have not had time to rehabilitate them all. Fergeson countered that Blaine’s characterization of bankers and money grubbing is unfair and that they look to serve their customers better everyday. The community banker said they are not afraid of a little competition, but they want a level playing field. -