What's That They Say About The More Things Change?

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Revoke the credit union tax-exempt status? Such a plan would "increase operational costs and reporting requirements," especially for credit unions that are struggling. Moreover, such a plan would "further frustrate an already over-taxed public by reducing their return on savings and effectively increasing the tax rate."

It sounds like more Washington rhetoric, and it was. But the year was 1983, and the statements above came from then NAFCU President John J. Hutchinson, who made those statements and others that will sound quite common to contemporary credit union ears before the House Ways and Means Committee.

From the What Goes Around Comes Around Dept., I was reviewing the yellowing pages of Credit Union News (a biweekly newspaper that was acquired by the publishers of The Credit Union Journal) from 25 years ago, and couldn't help but be struck by how once you've written a speech or prepared a report in Credit Union Land, just hang on to it, because you'll get to use it again.

For instance, how about these remarks. Remember your roots. Don't forget where credit unions come from. Never forget that "in the past credit unions have helped Americans weather such difficult times, as many are experiencing now." Always be mindful that credit unions have "provided a welcome and friendly alternative to traditional, profit-oriented banking industry.

That was the advice of Esther Peterson, special assistant to President Jimmy Carter for consumer affairs, who was speaking to the Illinois league's annual meeting. (Just below the story on Peterson, by the way, was a photo of then Illinois league president Dick Ensweiler, who is now president of the Texas league).

What else was on the minds of credit unions 25 years ago? Front page news at the time was this headline: "More Big Banks Squeezing Out Small Savers." The story noted that banks are "deliberately driving away savers with small account on the theory that savings accounts of less than $100 are not profitable." The story noted that Bank of America, for instance, required just $2 to open an account, but $1 to maintain it, and on accounts of $500 or less, there was a limit of three withdrawals per month.

Had you been a speaker at one of those annual meetings in 1983 and noted that in 25 years some banks would be approaching $1 trillion in assets, many in the audience would have certainly concluded that A) you were out of your futurist mind, and B) if that did actually materialize, the small saver and the poor would be shut out from banks. Who could have seen the forthcoming day when those same banks realized there is big money to be had from those who have little, and that fee income can be every bit as profitable as the revenue from lending.

Other notes from CU News, circa 1983:

* My favorite headline: "High Nuisance Says League Head."

* Ash from Mount St. Helens was interrupting ATM service.

* Credit unions in Detroit were participating in a "Buy American" auto promotion.

* Louise McCarren Herring, the last surviving participant to sign the CUNA's constitution at the historic meeting at Estes Park, Colo., spoke at the dedication of CUNA's new Credit Union Center in Madison. Herring noted the then debate over whether credit unions are a "movement or an industry," and opined, "How can people who are trying to reform something be called an industry?" She later added a statement every credit union could use today in explaining itself: "We are trying to enable every person who works to be able to convert his paycheck into the maximum of goods and services."

For those of you who may have read this far but dismiss 25-year-old "news" as just yesterday's disco ball, note the front page stories in this issue of The Credit Union Journal on the charter conversion attempts by the two Texas credit unions, and then read these words from McCarren-Herring, who still has two children active as credit union presidents.

"Mr. (Roy) Bergengren used to say that the trick was to get big without getting biggety. Time and time again we've seen (credit unions) become so impressed with their size and their importance that they forgot how they grew...You see, they forgot what they started out to do.

"We are a credit-oriented society. There is nothing wrong with credit as long as it's not too expensive, and it is in the hands of people who are interested in the individual and not just in making money off his fortunes. Decisions made in the credit union must be based on what is best for the member."

Although I can't imagine that McCarren-Herring envisioned charter conversions, she did offer this insight:

"Do you realize that it was the sin of greed that caused credit unions to grow and prosper? It may be greed that causes our undoing."

Frank J. Diekmann is editor of The Credit Union Journal. He can be reached at fdiekmann cujournal.com

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