The Danger Of The Bank Nose Under The CU (In)Tent
"Mission creep" is the latest, and possibly greatest buzzword used by opponents of credit unions. The phrase "mission creep" has it's origin in post-failure analyses of strategies that have gone woefully wrong; strategies that have veered off course from their stated purpose. It's a more polite, passive way to describe a failure by saying that despite all good intentions, once "mission creep" set in, the true objective became obscured and muddied so much that people forgot what they had set out to do in the first place.
"Mission creep" isn't as plainly offensive as the usual banker group attacks on credit unions have been in the past. It's not simplistic and insulting in the way that "walks like a duck, quacks like a duck..." is. It's more businesslike than that, and to my mind at least, that makes it even worse, because once again bank trade associations are telling credit unions how they should act, who they should serve and what their proper role is.
They are saying, in effect, "These misguided credit unions. Look what a mess they've made for themselves now. They get an inch (the Credit Union Membership Access Act) and now they want expanded business lending, community (gasp!) FOMs, and relief from regulatory burdens."
Being accused of "mission creep" is the latest weapon of words and lies at the core of the revised "divide and conquer" strategy used to combat the continued survival of CUs. This approach implies that credit unions no longer meet the needs of those they were originally chartered to help.
Left unchallenged, this approach may find sympathetic ears in state legislatures and Congress. Let's not forget that politicians, no matter how many fealties they may swear when speaking to credit union groups, are by nature compromisers. In an attempt to appear like Solomon, they will split the baby by trying to please both sides. When that happens, credit unions risk losing more than they gain. Let's face it, we just can't match the money power of the banks. We're small change, and big money talks. We've relied on grassroots organizing and that has saved us from slow annihilation in the past. But how often can we go to that well? Our PACs and campaign contributions have taken a major role of late, but can we be sure it's enough to withstand the pressure the banks can bring to bear?
Now, credit unionists and those who believe in the principles of the cooperative movement can be realistic, too. We have modest aspirations. We all live in the same world, a world that often just isn't fair. We have more than a dollop of pragmatism in our elected and appointed CU officials. But we just don't seem to be getting too riled up about having the banker's camel stick its nose under our tent again.
If we let banker groups imply that credit unions had a single defined "mission," and that we've taken that mission beyond the bounds of its original intent, we've already lost the next battle. And having to constantly rally the loyalty of members to stand up for us can result in battle fatigue, don't you think?
I say, yes indeed, credit unions had and still have a simple mission and we continue to deliver on that mission everyday. Credit unions provide service to those who are our owners; they assist those who have invested money into the cooperative. (We're still not for profit, as we must always remind those who would destroy us.) Furthermore, credit unions elect from that group of owners and investors the individuals who will oversee the credit union itself. So where is the mission creep?
That old saying about the camel poking his nose under the bottom of the tent is appropriate here. But what happens next? Once the camel gets a sniff, he wants more, so next comes his head, then his long neck and before long, he owns the tent. If the camel tried to march in through the front flap, he'd be refused. So the camel's nose is a warning, right?
Bankers think the camel's nose story applies to them, however. In their world, credit unions are trying to get into the tent that belongs wholly and unquestionably to bankers. They feel they should have a lock on the financial services market. How dare these upstart CUs make even a small dent in their action! Nevermind the record profits. Record profits are a result of how good business is, not about who deserves to conduct it.
They want to suggest that credit unions create an unfair advantage because banks cannot compete in the marketplace because of our not-for- profit status, by which we rightfully retain the corporate tax exemption.
It's not that credit unions have encroached into banking territory. It's that our members have asked us to fill a void largely ignored by bankers themselves. This isn't an abuse of our not-for-profit structure; rather, it's the proper response to member demand. The banking trade association structure that would destroy credit unions are supported by the same member banks that solicit credit unions to sign extended agreements for data processing, clearing share drafts, and EFT switching. The bankers offer a hand in friendship when a profitable business relationship is at stake.
But has the bank that actively solicited credit union business been willing to document in writing that they will not be a part of any organization that would bring about a lawsuit or seek restrictions against credit unions? Does that third-party bank provider offer excessive cash incentives to the credit union for business? Where will the bank stand when it is a credit union vs. banks showdown? How many credit union members' names, addresses are warehoused in banks' databases?
The banks are clever; I'll give them that. They have the buttons, they have the ads, and they have the letter-writing campaign. They want to label us as poachers because we serve our own members. My friends, that rank odor you detect is the camel in the tent.
Tom Reed is President/CEO of Encore Electronic Services Cooperative, Inc., Falls Church, Va. He can be reached at treed