By Frank J. Diekmann
This week federally chartered credit unions in the United States will be meeting in that quintessentially American city, Montreal, Quebec. Credit unions did emigrate to the U.S. from not just Canada, but French-speaking Canada (America’s first CU, St. Mary’s Bank, was chartered as Caisse Populaire Ste-Marie), so I assume that’s the connection.
The federal credit unions will be in Montreal for NAFCU’s Annual Meeting and a crowd of several thousand is expected. Given all the discussion around the just-approved new rules for member business loans, the challenges around the agency’s risk-based capital proposal, ongoing problems with data breaches and the upcoming EMV deadline, and sweeping proposals around field of membership rules for federal charters, there will be plenty of news and developments.
CUToday.info will be providing up-to-the-minute coverage from the conference.
A Fast Break Response
When news broke that Golden 1 Credit Union had bought naming rights to the arena that’s being built to be the new home of the NBA’s Sacramento Kings, my thoughts were 1) that’s pretty audacious, and 2) that building has just moved to the front to become Exhibit #1 in bankers’ arguments against the credit union tax exemption.
I wondered how long it would be before the bankers had the new exhibit up for display. The answer: faster than an online transaction.
If you missed the news, reported first here by CUToday.info, the $9.1-billion Golden 1 is reportedly spending $120 million over the next 20 years to have the building named the Golden 1 Center. The story can be found here. With 717,000 members, that comes to about $8.36 per member each year, and the credit union has not publicly talked to credit union media about the investment.
Almost immediately, the Sacramento Bee quoted Rodney Brown, president and CEO of the California Bankers Association, as saying that $6 million for the “right to have your name in bright lights on a sports arena is a sizable amount of money, but for a ‘nonprofit’ corporation that pays zero dollars in state or federal income tax, it’s probably not too much of a stretch.”
Brown was quoted as asking how it’s possible that an individual Californian can pay more taxes than the $9-billion Golden 1, and then addressed the CU tax exemption.
Calling the credit union exemption a “Depression-era tax break that has long outlived its purpose,” Brown said CUs have leveraged their taxpayer subsidy to “aggressively grow into a $1-trillion industry, at the expense of all taxpayers. He went on to say that during a press conference, Golden 1 President and CEO Donna Bland had “used the opportunity to advertise for new members, to add to their 720,000 existing members, directly proving the point of how outdated the credit unions’ tax-preferred status is.”
Given that it’s the state capitol and the California Bankers Association is based in Sacramento, meaning the bank trade association is going to be reminded almost daily about the Golden 1 Center and the issue will be lasting much longer than the Kings’ playoff run. And imagine if you’re the CBA or a local bank and you want to entertain clients at a Kings’ game—that’s not likely to go down well. There will also be concerts and other events year-round at the Golden 1 Center, keeping the tax exemption issue front and center for not just Golden 1, but all credit unions.
Credit Unions, It's Time To Help Your Own
Credit unions must generously come to the aid of people all over the world; now it’s time for those golf tournaments and Jeans Days to help raise funds for one of their own--the staff at the Filene Research Institute.
Credit unions should do whatever it takes to raise that money to buy wigs and plugs for Filene’s staff, for surely they have all pulled their hair out following the kinds of comments that were made during the recent CO-OP THINK Conference.
If you weren’t there, several speakers noted how wonderful it would be if only there was a place where credit unions, as cooperatives, could prototype and test various product and service ideas/projects. If only…
It was understandable these outside speakers at THINK wouldn’t know much about Filene, except to perhaps have heard of the department store. But the speakers were followed by CU folks on panel discussions in which they also lamented the lack of a forum in credit unions to brainstorm and develop product/service projects, and then beta-test them live in the market at credit unions. If only…
I had the honor to be an end-of-day wrap-up speaker at THINK, and I tried to convey this point without shouting, which is that this is precisely what Filene’s i3 program does! CUToday.info and Filene, in fact, recently partnered to feature an entire week’s worth of coverage of those projects, which you can here.
In the meantime, let’s get that fundraising started. Because a mind is a terrible thing to be covered by patches of hair and scabs.
Frank J. Diekmann is Cooperator-in-Chief at CUToday.info and can be reached at Frank@CUToday.info.