Chatfield: 'Vicious' Attacks To Continue

Register now

Banks' attacks on credit unions have gone on for years, but never as "vicious and persistent" as in recent months, declared Dave Chatfield, president and CEO of the California and Nevada CU Leagues.

"We battled some difficult legislation this year; and we worked to position credit unions as a critical constituency for next year's general elections," he said. "Advocacy has increased and has become critical. More people are going to Sacramento, Carson City and Washington, D.C. Our people are recognized now, and our issues are being heard."

Echoing a prediction earlier this year from CUNA CEO Dan Mica, Chatfield said he expects banks to attack CUs in 10 states next year. He said bankers are using the budget crises in 36 states as a way to "pick us off state-by-state, like they tried to do in Utah."

"It is clear this is a coordinated, national activity, not a grassroots effort by individual state banking associations," he asserted. "We are tired of their old divide-and-conquer strategy. The banks have tried to pit large credit unions versus small ones, and state-chartered credit unions against federal-chartered credit unions. But we won't let banks define what credit unions are or what they should be."

Chatfield warned that if banks got a legislative "win" in one state, that would give them "traction."

"They would become emboldened, so we need to fight them."

The fight is expensive, Chatfield noted. He said the California and Nevada leagues have put together "war chests" to prepare to counter the expected lobbying efforts by banks. In addition, a national response network has been created to alert all state leagues to respond in states where banks are launching attacks.

"We can't be surprised by these attacks, we must be prepared for them," he said. "The California Credit Union League has tried to ramp up political action committee activity, grass roots programs and PLAN-the political and legislative action network."

Chatfield said that among the potential tax threats the league is watching is expansion of the unrelated business income tax (UBIT), which might tax CU income from sources such as sales of insurance. Currently applicable to state-chartered CUs , Chatfield noted, "if banks have their way, it would apply to federal-chartered credit unions, also."

The position of the leagues is the services the Internal Revenue Service is considering taxing are central to the mission of CUs, Chatfield said.

Public advocacy is an emerging topic. The CUs in northern Nevada ran an advertising campaign on radio and television in recent months that has raised the public's awareness of credit unions in that region, he said.

For reprint and licensing requests for this article, click here.