'Tax-Free Banking Bosses,' ABA Boss, & Boss With A Loss
Credit unions generally get good press (when they get press at all). And then there's the coverage Massachusetts' credit unions got from the Boston Herald's Business Today and reporter Brett Arends. Under the headline, "Bad credit union report-Junket choice shows very little conventional wisdom," the "story," which is clearly opinion but isn't labeled as such, begins, "Once they were fighting FDR's good fight against the 'economic royalists.' Now they're sipping cocktails in the Magic Kingdom."
The coverage goes downhill from there. At issue is the fact the Massachusetts Credit Union Association's annual meeting, which has become something of a tradition to be held outside the Bay State. Earlier this year it was in San Francisco, and prior to that in Las Vegas, Next year it's scheduled for Orlando.
The piece notes, "Massachusetts credit unions, originally community banks for poor people that were given tax breaks to stay alive during the Great Depression, are preparing to send up to 1,000 senior managers and staff on a luxury three-day boondoggle." Setting aside the factual inaccuracies about the tax-exemption for a moment, you have to wonder what would motivate such negative "coverage." I'll go out on a limb and suggest either the Massachusetts Bankers Association or one of its members worked the reporter on this one. Indeed, when I first read the article I thought it had been pulled from a bank group's publication. For instance, the piece refers to credit union leaders as "tax-free banking bosses," and then adds, "In its defense, the junket is no different than those enjoyed by honchos in any other industry, including banking. Except that credit unions pay no corporation tax, a privilege now worth hundreds of millions of dollars a year, and which gives them an edge against rivals, including mutuals and one-branch community banks."
"I thought it was a mixture of invective innuendo and opinion," said MCUA spokesperson Rob Kimmett, who was quoted in the piece explaining why the association meets where it does. "He took two disassociated ideas and tried to draw them together."
Kimmett said the MCUA was still trying to decide how to respond, if it would at all, since the response might only perpetuate the "story."
Speaking of banks, as reported in The Credit Union Journal Oct. 3 and in this issue, The American Bankers Association has a new president, and d?tente with credit unions is not on his foreign policy agenda. Indeed, CUNA last week referred to Harris Simmons, president of Zions Bancorp in Salt Lake City, as a "rabid anti-credit unionist." He told the American Banker that "the best thing to do is to take these large, very bank-like credit unions, particularly those that have community rolls of membership...and recognize them for what the are, which is de facto savings banks. And they ought to have their charters removed." (He's likely photocopying the Boston Herald piece right now).
In the same article, another banker said of the new ABA president, "you could just see in Simmons the genuineness of his concern for his community and his customers." Which would explain why in Zions Bancorp's most recent annual report it decries that it could not provide even greater profits and returns to stockholders because credit unions' presence in the marketplace forced it to pay higher deposit rates and charge lower loan rates. Maybe by "genuine concern for his community" what was really meant was his gated community.
Every CEO, and not just at credit unions, has felt the pain of losing a valuable employee who has the type of resume that makes them a hot commodity. But you know their real worth went beyond just those sheets of paper and instead included what has been referred to as "inarticulated knowledge," the intangibles of experienced insights and gut feelings.
Associations are no different, and NAFCU experienced just such a loss with the departure of the well-known Bill Donvoan, the group's chief congressional lobbyist and a 26-year veteran of NAFCU, who left to join the law firm Venable, LLP.
"What helps us is I don't think NAFCU has ever been at a stage where it has the bench strength we have today," said NAFCU President Fred Becker. "When Bill began here there was one attorney; today we have six. Organizations go through these situations all the time. It's difficult to replace organizational knowledge, but we have Murray Chanow, who's been here eight years, and Brad Thaler, who's been here for more than five. Bill brought to us a number of contacts on Capitol Hill and he had a clear background in the credit union movement. NAFCU has had a long-term reputation of developing stars. It's always a challenge, but that's life."
Frank J. Diekman is Editor of The Credit Union Journal.