Credit unions shouldn't expect any changes in the attack posture of the American Bankers Association under new chairman C. Kendric Fergeson. Fergeson is chairman of the $267-million bank holding company NBC Corp. Below is an excerpt of an interview Fergeson did with the American Banker's Alan Kline.
Let's talk about the issues facing community bankers right now. What is keeping them up at night?
Fergeson: No. 1 right now would be the credit union issue. They think that a nontaxed bank has such an unfair advantage over the rest of us that are paying our fair share.
Credit unions have this image of apple pie, but that's a total misconception. Some of these nontaxed banks are enormous. They use that unfair advantage to promote themselves."
The credit unions argue that they are not as much of a threat as banks say they are. Take small business lending, for example. They say that they go after customers that banks essentially don't want. How do you respond to that?
Fergeson: There's not a customer I don't want. I have two bank charters. At the one in Tulsa, our average size loan is $37,000. Our average size loan in Oklahoma City is $65,000. What do they mean they're going after customers I don't want? They should not be making any commercial loans, period. I think the credit union regulators continue to stretch their authority, and it is almost constant. They are always bumping up against the limits of what Congress said (credit unions) should do.
The ABA has already filed a lawsuit against the National Credit Union Administration because bankers believe it is overstepping its authority on allowing credit unions to expand fields of membership. Do you think there needs to be a legislative solution?
Fergeson: The total legislation would be a massive overhaul of the industry, and that would really be hard. I'm not sure when that will happen-it may be when my grandchildren are in banking-but it will happen. When the credit union industry is growing at a 20% compounded rate and the banking industry is growing at a 5% compounded rate, they are going to get big enough some day that Congress is going to say, 'There's a nice, big, untapped source of funding,' and tax them. If they sound like a bank and act like a bank, talk like a bank, they ought to be taxed like a bank.
