CEO Finds A New Loophole
GLENDALE, Calif.-After being reprimanded by NCUA for publishing financial performance ratings of local CUs, Stuart Perlitsh, CEO of Glendale Area Schools FCU, is helping members of his credit union find that information on their own-and is giving them a cash incentive to so do.
More than a year after wrangling with NCUA over its request to remove an ad from GASFCU's website that suggested the credit union's deposits were safer than some area banks credit unions-and eventually complying-Perlitsh is back with a contest that awards $50 to the first member who correctly researches and faxes in BauerFinancial ratings of Telesis Community CU, California CU, Wescom CU, and Bank of America. The contest appears in the CU's newsletter, which was recently sent to members and is posted on GASFCU's website.
"The last time we published the (Bauer Financial) ratings for Telesis and Wescom the NCUA got very agitated and asked us to take the information down," Perlitsh told Credit Union Journal. "They said, 'Don't publish the ratings. We don't like it.' Well, this time we are not publishing the ratings. So I believe we are in compliance."
The current newsletter article touts the $301-million GASFCU's "sustained superiority" and "five-star" rating from BauerFinancial. It then asks members to take a quiz and determine "how many stars" Bauer Financial assigns each of the competing institutions. Perlitsh noted the article gives members a "hint," stating that none of the four competitors "have a five-star rating." A link to www.bauerfinancial.com is included.
Despite its limited run in 2009, the effort to educate members on the safety of their GASFCU deposits was successful, Perlitsh noted. He expects the new contest to have similar results. "What I hope to accomplish is the same-to stress our safety and soundness relative to other financial institutions, including credit unions. I believe in transparency and the NCUA is promoting transparency. I would love to publish our NCUA exam. But NCUA won't let me. I strongly believe our members have the right to know we are safe and sound."
Perlitsh added that the credit union hopes to get the winning member to stop by the main office for a photo, which will be placed in the CU's newsletter along with the person's comments around GASFCU's "continuing safety and soundness."
Last year, NCUA Regional Director Melinda Love sent the CEO a letter asking him to "work toward a common goal of a safe and secure financial industry for the entire nation" by removing the controversial ad. She told Perlitsh the CU's former ad "implies that money is not safe unless it is deposited at financial institutions such as your credit union with a four-star rating or higher" and reprinted a late 2008 letter from former chairman Michael Fryzel that implored credit unions not to display ads that could undermine confidence in the country's financial system (Credit Union Journal, March 2, 2009).
NCUA's attention last year may have done Perlitsh a favor, according to the CEO, who noted GASFCU's website received record hits after NCUA's request made news. Does he expect NCUA to react in the same manner this time? "I am not expecting them to, since I believe we are in compliance," Perlitsh said. "But, I guess, I would not be surprised if they do."