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Conversion Report Gets More Ink in Wisconsin

MADISON, Wis. - The president/CEO of the Wisconsin Credit Union League, Brett Thompson, is responding again to that study critical of CUs switching to banks written by two University of Wisconsin-Whitewater professors. In a Feb. 25 opinion piece appearing in the Wisconsin State Journal, Thompson wrote that if CUs "went...

By Jim Rubenstein | Updated on March 07, 2006

MADISON, Wis. – The president/CEO of the Wisconsin Credit Union League, Brett Thompson, is responding again to that study critical of CUs switching to banks written by two University of Wisconsin-Whitewater professors. In a Feb. 25 opinion piece appearing in the Wisconsin State Journal, Thompson wrote that if CUs “went away,” consumers might turn to for-profit banks and would suffer in higher loan rates and less personal service. The two assistant economics professors, Russ Kashian and Jeff Heinrich, wrote that CU-to-bank conversions do not benefit their members or consumers based on a nationwide survey they took of 175 financial institutions. In the latest commentary appearing in the State Journal which did a Feb. 17 article on the Kashian-Henrich report, Thompson forecast that without CU competition in the marketplace, “consumers would see the cost for banks’ services and their fees grow unchecked – not a good scenario.” Wisconsin CUs, he wrote, “have taken a strong stance against conversions because we cannot conceive of any circumstance under which conversion would benefit credit union members.” Moreover, “our state has a lot to lose if credit unions go away,” he continued. “Low-income people would lose their less costly alternative to small, short-term loans offered by payday lenders and small businesses whose borrowing needs are just `small potatoes’ to big banks would be at a loss for their next loan.” Thompson said the league believes CU owners must decide if conversion is in their best interest adding, “we agree with the conclusion of your article; it’s hard to imagine any circumstance under which they would.” -

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