SAN DIEGO -
Ensweiler, the president of the Texas league, told the CUNA HR/Training and Development Council Summit here that it is imperative that front-line staff be able to answer that question as they are the "ambassadors" for their CU.
The key, he said, lies in ensuring that among the training employees get is an understanding of the difference between credit unions and banks, including seven fundamental principals: CUs are cooperatives with equal ownership; they are not for profit; they have volunteer boards; members must qualify to join; they have an exemption from income taxes due to their not-for-profit structure; they promote financial literacy, and they operate with a "guiding principle" of people helping people.
"Do you promote these principles to your staff every day?" Ensweiler asked the audience.
Many leaders within the CU community are well versed in the CU difference, Ensweiler said, but that often doesn't include front-line staff who get those questions most often.
It's all the more important, he said, because bank trade associations remain on the attack, with Ensweiler noting that Congress has "a lot to do with our life." The early returns from the 110th Congress, which featured a Democratic majority following the November 2006 elections, are positive, he reported.
"Bankers convinced Chairman Thomas [former U.S. Representative and Chairman of the House Ways and Means Committee Bill Thomas] credit unions' only purpose was to serve poor people, and this was the reason for our tax exemption. This is not true; the tax exemption is due to our structure. But, we must tell our story over and over. We must tell our story and make sure it is understood."
Banks had the opportunity to charter not-for-profit, but chose to charter for profit, Ensweiler pointed out. He said the Community Reinvestment Act (CRA) is an example of how "banks would rather fight us in courts and in Congress than help people on Main Street."
"Banks don't like any competition, and Enemy No. 1 is credit unions," he said. "There is no secret we are on the side of right-no one can refute that. But, we can't let banks tell our story. Even though it doesn't make any sense to apply CRA to credit unions, we must be aware of what banks are saying. Rather than trying to get rid of it, banks want to see it imposed on credit unions."
Taxes, Conversions & Takeovers-Oh My!
The Unrelated Business Income Tax, or UBIT, is another issue credit unions should monitor closely, Ensweiler reported during his wide-ranging address. He said the Internal Revenue Service is preparing to issue a memorandum on UBIT that could have a negative affect on CUs.
"We are working hard on the inside, but we are very disappointed with the initial report from the IRS."
Importance of Advocacy
"We have a lot of things on our plate we have to defend, and all affect your credit unions," he warned. "We must make sure the credit unions' voice is heard, and every person on the staff has the responsibility to become involved with protecting credit unions. Because banks will continue to challenge credit unions and their structure."
The membership also must be brought into the fray, Ensweiler asserted. He suggested forming a political involvement committee to track legislative and regulatory activity and report major issues to the board. In addition, he said committee members should interview political candidates to determine if they are familiar with, and sympathetic to, CUs.
Project Zip Code is a "huge, huge tool," he said, because if every credit union participates, it could make a difference to Congressmen/women by showing how many CU members are in their districts.
"Work with staff and encourage them not to sit back. Encourage all staff members to support their PAC [Political Action Committee]. If we get every credit union employee to give $1 per week, that would be huge. Employees of financial institutions can donate by payroll deductions. It is hard to write a check for $50, but people can give $1 per week.
"The PAC money supports candidates who really support credit unions," he added.
