New League CEO Laments Banks' Progress
The banking trade associations have been able to make "progress" in their continuing campaign against credit unions, according to Bill Cheney.
"The bankers are trying to do away with credit unions so people don't have a choice," said Cheney in his first address as president and CEO of the California and Nevada Credit Union Leagues since taking over for the retiring David Chatfield. "The bankers have made progress. They have launched legal efforts in Utah and Pennsylvania-not enough to restrict credit union growth in those states, but they promise more lawsuits."
"We see it in their communications. We see it on their website. It is never-ending," he continued. "Harris Simmons of Zions Bank in Utah continually says credit unions have an unfair advantage. That is nonsense. There is nothing wrong with the banking industry. Zions Bank's profits and share price are up. Community banks' profits are up. It is hypocrisy. If our charter is such an unfair advantage, why are no banks or community banks converting to credit unions? No one can answer that question."
Chatfield preceded Cheney on stage during the general session, which took place the morning after a dinner honoring Chatfield's 40 years in the movement. Chatfield described the dinner as very special for him and his family, but said the next day was "back to reality."
"The reality is, we have a wonderful organization, but it has its challenges. The No. 1 challenge is those who want to destroy the credit union system," he said. "Over time, banks want to weaken and absorb the credit union system. They want to divide and conquer-large credit unions versus small credit unions, state chartered versus federal -we haven't fallen for this tactic before, and I hope we will not fall for it in the future."
Chatfield said banks are following a strategy of "containment and conversion." "Those are their words, not mine," he told the audience. This strategy involves "boxing in" CUs; not allowing them to offer enough services to their members, then converting the credit unions to mutual savings banks. "If we remain united, the way credit unions have been for so long, this will not work," he said.
According to Chatfield, Cheney is the "perfect person" to lead the two leagues. "But, he needs your help," Chatfield said.
Cheney said taking over as president and CEO of the California and Nevada CU Leagues from a credit union movement legend such as Chatfield is as difficult as taking over from a Hall of Fame basketball coach who won 10 national championships in 12 years at the University of California, Los Angeles from 1964 to 1975.
"It is a great honor, but also a tremendous challenge. It is sort of like following John Wooden at UCLA after all his successes and championships," said Cheney. "I don't know who followed John Wooden, which tells you something. Perhaps some of you in California know who coached after Wooden, but coming from Texas, I don't. I know who John Wooden was, and I know who Dave Chatfield was. Someday, I hope people remember me."
Other Points Raised
Among the other points raised by Cheney:
* He said all CUs are threatened because they are a check on banks' potential to make even more money. "With them, it is all about raising profits for their shareholders. Imagine a world or a community or a city without credit unions. It is scary."
* He noted America's Community Banks was meeting at the same time as the Big Valley conference and that one theme of the ACB meeting was "help us beat credit unions at their own game."
* He said he expects whomever succeeds the retiring Bill Thomas as chair of the House Ways & Means Committee will "continue in the same direction" and expect CUs to justify their tax-exempt status.
* Congress will be looking to credit unions for "transparency," and to define the term "modest means," Cheney continued. He said credit union CEOs' salaries will be scrutinized, as will the salaries of others in senior management.
* As for "modest means," Cheney said banker trade organizations have attempted to paint this as an equivalent of "poor." On the contrary, Cheney said CUs serve middle-income Americans.
He said the leagues believe 120% of local median income should be the upper threshold for this definition, and is urging NCUA to take into account field of membership differences when gathering data, as the median income of a single-sponsor CU is vastly different from that of a community credit union.
* Cheney said there are six committees examining data security. "One Congressional committee is bad enough, but six? We must monitor this effort and watch for unintended consequences."
* New radio spots in the league's public advocacy campaign debuted in January. "The key messages are credit unions serve the community, profits are reinvested in the community, and credit unions are locally owned. I know it is a significant hardship for many credit unions to make the payments for the public advocacy campaign, but it is absolutely critical in the fight against banks."