What Are We, Monsters? Bankers Seem to Be Pushing That Message

There’s something afoot inside the banking public relations and lobbying game. In less than a month, two opinion pieces (one disguised as a news article) published in two high-profile, Washington, D.C.-focused news outlets have attempted to change the image and talking points of what credit unions actually are to consumers, members, the country and the financial industry at large. In fact, I’d argue the two hit pieces were a way to drag credit unions into the for-profit banking pool/swamp to say, “Hey look! Credit unions also suck – they’re just like us!”

Honestly, I don’t think I have to argue that point – that’s exactly what those articles were about.

Let’s hop in the Context Time Machine for a moment. Unlike Delta, I won’t change what it takes to keep your Time Machine flyer miles status. Hop in. They’re all imaginary first class seats, anyway.

Some time ago I was a lobbyist and PR wonk for a number of industries including telecom and even the cut-throat people in the honey industry. I spent a good chunk of my professional life working with major and extremely minor media publications to get the message out about how terrible certain telecom companies were, and how then-current policies were hurting consumers or how China was pumping in an incredible amount of synthetic honey into our grocery stores via shipping containers coming in through Seattle.

I worked with political staffers and speechwriters to pound the PR message into the world to influence politicians to change laws that would help whomever I was working for at the time. A lot of times it worked and sometimes the message just fell flat and/or politicians stopped paying attention because they needed to raise money for the next election. This public relations and lobbying machine works nonstop and has been working for as long as this country has been a country. Some industries are much better at it than others, and some industries and people gladly lie and/or misrepresent data to tell an out-of-context story that helps push an issue or narrative if there’s money on the table.

Side note: The honey people were actually very kind and yes, the synthetic honey story is true and terrifying.

Back to today’s world. I hope you had a nice journey and fly with Context Time Machine again soon. Buh-bye.

I never got into the scary “I’ve sold my soul” PR game, but many of those I know who did got very rich and some even had to testify in front of grand juries to protect themselves from prosecution. Me? Well, I came to the credit union side where I can wear my Red Sox hat all day at work/my home office if I want to.

So, back to The Wall Street Journal and Politico Magazine pieces. At this point, if you don’t know what I’m talking about, just Google “credit union” under the news tab and you’ll see the editorials. The SEO game is strong with those publications, so you’ll easily find them.

The basic point of the WSJ editorial was that credit unions have become banks, and are sponsoring sports arenas and buying up bank branches that, gasp, were branches either abandoned by banks or that belonged to banks that needed money for shareholders and weren’t interested in serving that particular community anymore because it wasn’t profitable. My apologies for that run-on sentence.

The editorial claimed that credit unions were “veering from that mission” of cooperative values by becoming no different than banks. Is that a slam on credit unions or banks? Undecided.

While these one-off anti-credit union editorials happen every now and then, the WSJ opinion piece was shared by many credit union people on LinkedIn and Facebook to express some minor outrage at the audacity of the silly write-up. The piece was seen and then quickly faded away.

Then came the Politico Magazine article. Or editorial? Or opinion piece? All of those in one?

While the argument laid out that overdraft fees can be very problematic and historically have impacted minorities is something you can’t really argue with, calling credit unions predatory is a very big stretch.

Our newsroom saw the piece almost immediately after it was published and we were initially very confused by it.

Sure, many credit unions still have NSF or overdraft fees, but for very different reasons than banks. A very long list of credit unions got rid of them in the past two years and more are following that trend.

As a journalist, I think it’s fair to call out institutions and leaders for their behavior, be it criminal or ethically questionable.

But taking a report filed in California to call credit unions predators for charging overdraft fees while the same report shows banks are raking in millions in those same fees (and the report doesn’t reflect the many other banking fees that credit unions don’t charge) is like comparing apples to switchblades.

I read the report and found it very interesting. But proportionally, the sheer asset size of banks completely overshadows any credit union, even the larger ones. The reason the report doesn’t look great for credit unions is because our structure, regulations and missions are wildly different from banks. Therefore, the fees tracked for the report look kind of bad.

Did the banking industry pitch this report or give a heads up to the author? I have no idea. I would have if I was still in that PR/lobbying game.

Over on the credit union lobbying side of the world, officials were getting antsy about this Politico piece and members of CUNA and NAFCU were a bit “shaken,” as one source told me.

Six days after the article, I got a call from NAFCU saying that CUNA President/CEO Jim Nussle and NAFCU President/CEO Dan Berger had co-written a rebuttal. I agreed to publish it because it was indeed newsworthy and unusual.

Nussle and Berger (Nusger? No, Bergsle? No. Jan or Dim? They don’t have a good celebrity couple name) wrote, “Aaron Klein’s recent article in Politico Magazine on credit union overdraft shows a startling lack of awareness of credit unions, their role in the marketplace, and the way they serve members and communities.”

They continued, “Credit union members using overdraft protections have affirmatively opted into these services for a variety of reasons, in accordance with regulatory requirements, including disclosures. These aren’t hidden or obscured costs.

“They do this because overdraft programs provide a needed service and offer real value. Using an overdraft program is better than not being able to buy groceries to feed your family or missing a mortgage payment, and certainly doesn’t sound like taking advantage of members.”

Will this co-written piece by Nussle and Berger resonate with the larger political and policy-making audience that WSJ and Politico have? I don’t know. Again, comparing CU Times to those media giants is a little withering – so let’s not play that game. It’s like comparing the $23.4 trillion in assets held by U.S. banks while credit unions sit at $2.1 trillion. Hell, the assets of the top three U.S. banks individually are bigger than the credit union system. Take that Wells Fargo, as you sit at number four with $1.8 trillion in assets.

Could credit unions do better? Absolutely! Should fees be abolished? I don’t know if that will ever happen.

One thing seems certain – the banking PR machine is working very hard at getting the not-for-profit status ripped away from credit unions. What will credit unions do to stop it?

Michael Ogden is editor-in-chief for CU Times. He can be reached at mogden@cutimes.com.