WEST PALM BEACH, Fla. - While their trade groups are lobbying hard to ensure credit unions are eligible for any federal assistance that may become available, a number of credit union leaders are saying CUs should not accept any government handout.
In postings on numerous blogs, including Credit Union Journal's CUSoapBox.com, credit unions are expressing their belief the CU community doesn't need, nor should it accept, any of the so-called "bailout" money.
Those opinions are being expressed at the same time both CUNA and NAFCU have been scrambling to get credit unions included in any funds that may be available under the Troubled Asset Relief Program (TARP).
According to numerous blog posts, taking TARP money would only weaken credit unions' stance that they are safe and sound. As one person, identified as Matt Vance, opined on CUSoapBox.com, "Is there anywhere we can tell CUNA, NAFCU or NCUA that we in the trenches think it's a bad idea and would like see if we can find a solution on our own?"
Andy LaFlamme wasn't quite as diplomatic with his CUSoapBox.com post: "Keep that dirty money away from CUs. We've worked so hard to portray ourselves as solvent and secure. The only thing getting TARP money (in any amount) will do is discredit all the credit unions that DON'T need a bailout (nearly all of them) and are proud of it.
"We should be turning our back on bailout money, standing on our own, and truly proving that we are different and that the credit union difference really matters."
LaFlamme, a marketing specialist for the $245-million Maine State CU in Augusta, told Credit Union Journal that taking TARP money would jeopardize credit unions' opportunity to capture market share from banks today. "At our credit union we are trying hard to highlight the great press credit unions are getting. Then you go to the NCUA site and see that we're looking for TARP money. That seems contradictory to all the positive press and contradictory to what most credit unions are experiencing from a financial standpoint. I think banks will jump at the chance to highlight that we are taking TARP money."
CUNA is receiving much the same message from CUs, shared VP of Communications Pat Keefe, who pointed out that sentiment to avoid bailout money is "not universal. There are some credit unions interested in having access to TARP money. Our position is that whatever is available for the banks should be available for credit unions."
Keefe said efforts to secure TARP money for CUs "keeps all the options open for those who feel that if they need the money it should be there," suggesting the support could come in the form of a "shadow TARP" managed by the National Credit Union Administration and backstopped by the Treasury.
All of the CUSoapbox.com posts about the TARP money started after blog host Ron Daly published the story: "Welcome to CUSoapbox Bank - We're getting in line for bailout money!" "We hit a nerve with that one," said Daly, president of the Herndon, Va.-based DigitalMailer, who moderates the Journal-sponsored blog.
Daly explained that Vances's response pointed out "there is a need for members of the credit union community to address CUNA, NAFCU, and NCUA at once about TARP. We realized there isn't a place for that to happen. So we created a Town Hall page on CUSoapBox.com."
CUSoapBox readers can now go to CUSoapBox.com and choose "Townhall meeting" under "Categories" in the left-hand navigation and address their concerns to the CU trade groups and the NCUA. "We hope this will be the first of many more townhalls," Daly said.
