You've seen the headlines by now. The bankers are on the attack again; beating the taxation drum in Utah, Florida, Iowa- maybe even other states, but in a more discreet and, as yet, non-public fashion.
Driving these attacks, to some degree, are the budget crises facing a growing number of states-44 and counting- which the bankers are twisting to their own advantage. Their game: Convince state legislators that the way to close the revenue gap is to tax state-chartered credit unions.
These insidious attacks are growing in both number and intensity. It seems as if the banking industry is looking for any excuse it can to attack. Their goal, it seems, is to weaken the financial strength of credit unions through taxation- thus impeding credit unions' ability to grow or fully serve their members.
Among the tactics bankers employ in convincing lawmakers to support a tax is to imply credit unions are guilty of "mission creep." That is, credit unions have strayed from the mission of serving the "little man" with only the most basic of financial services (meaning, those basic financial services that existed during the early 1930s).
Bankers Contradict Own Arguments
We all know how baseless is that argument. In fact, bankers themselves have stressed that Depression-era laws governing banking be changed to allow them to operate in a modern and quickly changing economy.
Further, anyone who thinks the bankers' attacks apply only to state-chartered credit unions should reevaluate. Bankers are boldly pursuing their strategy in the states likely with an eye toward the federal tax exemption. It's a divide and conquer approach.
Enough is enough. All credit unions- whether federally or state-chartered-cannot afford to sit back and merely respond to these attacks. The time is fast approaching when credit unions must stand up and force back on their heels these bankers who attack credit unions.
Internal discussions are going on right now at CUNA about how best to structure our answer to the bankers. In the meantime, much of what credit unions will incorporate into this effort, when the time is right, is already in place. For several years, CUNA has been advocating the importance of political action by credit unions. We have been building the structure to facilitate credit union involvement, and developing tools for credit unions to use right now.
On the firing line for credit unions are several key programs developed by CUNA and the leagues and in full operation..
CULAC (the Credit Union Legislative Action Council) has been building its resources and outreach for the past several years. Today, it stands as the 13th largest PAC (in terms of contributions to federal candidates), and among the largest and most active among trade associations.
The importance of the size and activity of CULAC cannot be understated: Money is the "mother's milk" of politics; it helps legislators either remain in office, or potential legislators to attain office. It's that simple. CULAC raises funds from individuals and uses its resources to support credit union-friendly candidates for federal office. It's a vital tool for credit unions in our efforts to support those who support us-and not the bankers.
A new and growing tool is Project Zip Code. A computer-based program used by credit unions, it counts members by congressional district or state, and identifies which credit unions have how many members in any given congressional district or state. To date, more than 23 million credit union members have been counted through this program. We hope that number will grow to 40 million within coming months, and make Project Zip Code an even more valuable tool to help credit unions illustrate their strength in numbers.
Meanwhile, CUNA and the leagues have been working together to stress political involvement by our member credit unions. The Political and Legislative Action Network (PLAN); crafted by CUNA and the Leagues, is developing ongoing advocacy, involvement and grassroots strength among credit unions for the future. Made up of nine steps to achieve political effectiveness-including participation in Project Zip Code and Project Differentiation (our program to demonstrate in detail what makes credit unions truly different from other financials), the PLAN stresses enhanced involvement by credit unions in the political process.
Beginning To make Inroads
Through this program, and earlier work, credit unions seem to be making inroads. For example, more and more credit unions are getting involved in "partisan and issue-oriented communication." This type of communication utilizes credit union newsletters and other vehicles to inform their members about the political, legislative and regulatory issues that are important to credit unions, and the members themselves.
How effective is this communication? According to exit polling conducted for CUNA during the November elections, one in five voters said they remembered receiving information about political candidates from their credit unions. And credit union involvement in this area is expanding rapidly, encouraged (no doubt) from election year successes. In the previous election (2000), for example, less than one in 10 voters said they had received information from credit unions about political candidates.
How valuable is this communication? Presenting those polling results to political candidates-both incumbents and challengers- makes an important point. That is: Credit unions have an effective outreach method, which can benefit those who are supporting credit unions and their members.
Employing these programs and tools can go a long way in sending an unequivocal message. That is, credit unions are involved in the political process and have the know how and resources to have an impact in that process.
Now, all that is left is for credit unions to make the commitment to use these tools. Get involved in the political process, join the PLAN, support credit union goals. Using these tools, we are strengthening the foundation to turn back the bankers' attacks.
Let's be clear about something else as well. Credit unions have their own goals, such as those identified through the Renaissance process. Key among those goals: Credit unions must have as much flexibility as possible in order to best serve their members.
Confronting the bankers will take a great deal of time and resources. Nevertheless, we can't-and won't-divert our effort to accomplish the goals of credit unions.
Remaining True To Calling
We've got the tools, we have the experience, we've had enough-but we won't be diverted from our goals.
The bankers say that their goal in attacking credit unions is to ensure a "level playing field" in the financial marketplace. One has to suspect if it isn't really greed and avarice that drives the bankers. No matter. Regardless of their motivations, credit unions will continue to serve their members as their members want to be served.
Dan Mica is the president/CEO of CUNA & Affiliates. Mr. Mica can be reached at 601 Pennsylvania Ave. NW, Suite 600, Washington, D.C. 20004-2601.
