By Frank J. Diekmann
Well, have you? Have you lost your way?
One banking industry trade group says you have and is broadcasting to the world a new campaign that claims credit unions no longer serve a purpose, with media messages headlined with the question/accusation, “Credit Unions: Have They Lost Their Way?”
Given the feedback CUToday.info has received and comments on my LinkedIn page, many within credit unions are upset with the bankers, angry even, over the message. I couldn’t disagree more. I think the bankers have done credit unions a favor and the CU community should take good advantage of it.
As CUToday.info was first to report here, the Independent Community Bankers of America has launched a new salvo attacking CUs and demanding Congress “investigate.”
“Congress granted credit unions a tax exemption nearly a century ago intended to help people of small means, but today many are exploiting it at taxpayers’ expense,” the ads state. “It’s time for another look.
In releasing the ads, the ICBA said the objective is to “inform Americans about the credit union tax exemption and its impact on financial services consolidation in local communities” (a rather self-owning claim, given banking industry mergers and market exits).
A Wider Message
The media buy isn’t the usual mix of Capitol Hill publications, where the message isn’t seen by 99% of Americans and gets lost in the DC cacophony created by a million interest groups with a billion messages all supposedly designed to grab Congress’ ear (but it’s mostly just talking to each other or their own members to justify their existence). Instead, the ICBA’s ads are running in editions of USA Today in Florida, Georgia, Illinois, Indiana, Michigan, Minnesota, and Wisconsin.
“Congress granted credit unions a tax exemption to serve people of modest means—not to subsidize their rapid growth at the expense of local communities. After nearly a century, it’s time for another look,” argued ICBA President and CEO Rebeca Romero Rainey in a statement accompanying release of the new ads.
Couldn’t Agree More
Ms. Romero Rainey is correct. It is time for another look—but not by Congress, by credit unions themselves. Like any organization that was organized for a higher cause and that claims to be doing God’s (financial) work, the scrutiny should be welcomed by credit unions. Encouraged even. Forget the griping. Credit unions should be responding “We’ll take your challenge and raise you!” It’s a good exercise for each individual credit union and the CU community itself to take that proverbial hard look in the cooperative mirror and respond to the question the bankers have raised yet again.
Although it’s grown louder in recent years, criticisms of the CU tax exemption go back as far as FDR’s signature on the Federal Credit Union Act itself in 1934. But that doesn’t mean it’s guaranteed for another 87 years, nor should it be. Indeed, in 1951 Congress revoked the tax-exempt status of certain types of financial institutions, including mutual savings banks, which were/are member-owned and were stablished to serve members of modest means, encourage thrift, and provide safe and convenient facilities to care for savings. That should sound familiar. Congress found the mutuals had “lost their way” and had come to resemble and compete directly with commercial banks. That should also sound not just familiar but threatening.
What Really Needs to Be Heard
Unfortunately, we already know how this is going to play out. It’s the Shawshank Redemption of Capitol Hill debates. We’ve seen it before. Again and again. It's always on.
The credit union trade groups will now respond to this latest bank attack with well-practiced umbrage and facts and figures and counter-accusations and the like. They’ll produce charts and white papers that no one on the Hill and few in credit unions will look at or read, issue statements that will make no publication’s front page other than their own, and generally act like they are shocked, shocked, at the very temerity of the banking industry’s latest impeachment of their good works.
They’ll also point to the obvious hypocrisy in the bankers’ statement, and be right in what they’re saying.
Yada, yada.
Instead of pointing to what’s wrong with the bankers’ complaints, why not point to all that’s right with CUs? Every credit union should answer the question of whether they have lost their way by answering, “No, we have not, and here’s why.” And then fill in the blank. Again and again and again, with both the tangible values in money saved for members and assistance provided to those who are struggling, and all the intangibles, too, such as good works in the community. If you’re not keeping track, you need to be.
And if you struggle with the question of whether you’ve lost your way, then it’s time to get refocused and in the process get back on track.
One More Thing to Say
Remember, when a busy consumer or member of Congress hears about a tax exemption, the immediate assumption is there’s something sneaky going on and the money is going into someone’s pockets. And they’re right, but in the case of credit unions, it’s about 130-million pockets. So, take your hands out of your own and prove it.
And when you’re done with that process you should also have one more thing to say. “Thanks, banks, you did us a favor.”
Frank J. Diekmann is Cooperator in Chief of CUToday.info and can be reached at Frank@CUToday.info. Mr. Diekmann is also author of several new book, including the brand new “The Last Lyric,” a humorous satire about a murder investigation at the Rock & Roll Hall of Fame in which every line of dialogue is either a classic pop/rock song title or lyric. Available on Amazon, Apple iBook, Barnes & Noble and Smashwords. Mr. Diekmann is also author of a non-fiction compilation of the very best & worst he has seen and heard in covering more than 500 CU meetings and conferences, “501 Name Tags: How Everything You Need to Know About Business Can Be Learned at a Conference & Forgotten in the Trade Show.” It is available on Amazon, Barnes & Noble, Apple, Lulu, and Smashwords.