DALLAS – At least two Texas credit unions have been taken to task by regulators in recent weeks for running ads that suggest that their deposits are safer than those in local banks.
Both credit unions, Resource One CU and Texas Dow Employees CU, agreed to pull the ads after being urged to do so by the Texas CU Department and NCUA.
"We were told by the Commissioner not to do it anymore, so we’re discontinuing them," James Brisendine, president of $265 million Resource One, told The Credit Union Journal Friday.
The credit union ad, which ran in a local newspaper, asked "What is safer than money in the bank?" and answered with "Depositing it at Resource One Credit Union."
Brisendine said the ad had nothing to do with the recent travails among banks but was promoting a 16-month CD. "It’s really not aimed at taking anyone down," he asserted.
A letter from the Texas CU Commissioner urging Resource One to discontinue the ad followed a similar admonishment for Texas Dow Employees, which ran an ad recently that asked "Banking crisis? Not at TDECU."
The regulatory action came after the American Bankers Association notified NCUA, leaders of Congress and banking regulators of the ads. In a letter to NCUA Chairman Michael Fryzel, the ABA said the Resource One ad "unwisely raises fears about the stability of the banking system and the Federal Deposit Insurance Corporation"."
NCUA’s Fryzel responded to the ABA by sending a letter to all federal credit unions urging them to resist ads suggesting any weakness in bank insurance. "In these turbulent times," said Fryzel, "consumers need to have faith and confidence in the financial system."
"We need everyone to work toward a common goal of a safe and secure financial industry for the entire Nation," said Fryzel.Beyond being untrue," said ABA President Edward Yingling, "such an ad can have only one result: without boosting confidence in credit unions, it will serve to undermine confidence in all insured depository institutions. For that reason, the banking and credit union industries have long had an "implicit" understanding that neither would do anything of this nature."
