NCUA Board member Deborah Matz refuted several anti-credit union assertions being circulated by credit union foes and allies, alike.
"You and I know these perceptions are inaccurate. But your competitors are working very diligently-and I might add, very effectively-to convince lawmakers that these perceptions are reality," Matz told more than 1,500 attendees to NAFCU's annual convention.
The first one, she said, is that "large credit unions are just like banks."
"First of all, no credit union-large or small-is structured like a bank," Matz asserted, pointing out the member-owned, not-for- profit structure of credit unions. And large credit unions, she stated, are providing high-quality and innovative services to members, just like small credit unions.
Matz said it is not true, as some have concluded, that she looks at large credit unions in a negative light. But she has concluded that small credit unions are in need of more assistance in continuing to survive and compete in the financial services marketplace. "My concern about small credit unions is why some people have the perception that I am interested only in small credit unions," she said.
The second perception about small credit unions, that "credit unions have no business making business loans," is also false, according to Matz. "Even some credit union officials believe this perception."
Credit unions, she insisted, can fill a niche for small business loans that banks and other lenders are not interested in making. "Often, because they are small loans, members cannot get them from other institutions," she noted.
The third perception, that "credit union taxation is only a threat to large state charters," is every bit as false as the first two, asserted Matz.
"No matter what state, what charter or what size-I believe every credit union has a stake in the tax debate," Matz stated.
"Taxation is contagious," she said. "If states decide to tax credit unions, taxing federal credit unions may seem like a good idea to some federal legislators. And if large credit unions are taxed, it will be only a matter of time before smaller credit unions are taxed, too."
Matz called on the credit union faithful to tell their stories to the public, to state lawmakers and members of Congress, to help dispel these perceptions. "Educate your community leaders and your federal legislators," she urged. "Tell them what your credit union does for your members and your communities. Remind them what makes credit unions different from banks."