Representatives from many of California's credit unions met with state legislators in an effort to counter charges by the banking industry that credit unions are responsible for a slip in market share by community banks.
From 1992 to 2003, community banks' market share in the Golden State fell to 13% from 30%, and community banks have been painting credit unions here as the reason (The Credit Union Journal, April 19).
"We are trying to combat the distorted message California legislators are getting from the banking industry," said league spokesperson Mark Lowe. "They are blaming credit unions for the decline in market share by community banks, which simply is not true."
Instead, California's credit unions are arguing it is an unchecked series of acquisitions of successful community banks by large banks.
Credit unions, Lowe added, are trying to fill the void left by the departure of many community banks because they are the only locally owned financial institutions in many areas.
"Banks have been going to the legislators and saying, 'Look at the decline of the community banks. It's the fault of the credit unions.' In reality, the market share for the biggest banks has gone up. Our message is, we are not saying anything negative about the acquisition of smaller banks by bigger banks. We just want the legislators to know banks are not telling the truth about this issue."
A recent government relations rally organized by the league attracted more than 200 credit union representatives to the capital.
During their meetings with California lawmakers, credit union leaders lobbied for support of Senate Bill 1292, sponsored by state Sen. Joe Dunn (D-Garden Grove), which would allow state-chartered credit unions to offer services such as check cashing, money orders and money transfers to other countries to non-members, as long as they meet eligibility requirements.
Lowe said the goal of S.B. 1292 is not to continue to sell those services to non-members, but to eventually turn those people into members.
"The people who use those alternative providers will always remain unbanked, always remain on the margins, because they don't get introduced to financial institutions. A lot of it goes back to distrust of financial institutions."
"Our message was pretty well received in the capital," he continued. "It is a message we will have to keep repeating, but legislators seemed receptive to the idea that credit unions are not doing in community banks."
