To the Editor:
Paul Nadler's article "Watch Out, Bankers - Here Come the Credit Unions" (Oct. 10) raises a number of issues about credit unions that may be puzzling to a large number of your readers.
Most confusing was his description of his recent visit to Eascorp, a corporate credit union in Woburn, Mass. Mr. Nadler recounts that, during his visit, staff members of Eascorp were discussing with executives such things as image processing of share drafts (checks) at the credit union, obtaining the "most yield' from safe investment vehicles, and monetary policy. "I could have been at meetings of top community bank executives, who discuss the same kinds of problems, choices, and policies," he adds disdainfully.
My confusion is this: What is the source of his disdain? Mr. Nadler seems to sneer at the credit union staff and executives for discussing the items that "top community bank executives" also discuss.
As persons holding the hard-earned savings of credit union members in their hands on a daily basis, it is the obligation of credit union leaders to discuss the issues Mr. Nadler seemingly points to as reserved only for top community bank executives.
Credit Union leaders rightfully should be discussing methods for ensuring more efficient operations in order to better serve their members (such as image processing of share drafts). Credit union leaders should be discussing yields on their investments in order to ensure that their members are getting the best return possible. Credit union leaders should be discussing economic trends and policies in order to determine what steps they must take to look out for the best interests of their credit unions.
The sort of discussion Mr. Nadler overheard sounds more like responsible leadership than anything else. Isn't that the way all financial institutions should be run? He then points to an alleged erosion of the "common bond" as further proof that credit unions are no longer meeting the justification for their tax-exempt status.
Mr. Nadler should know that the tax-exempt status of credit unions results from the unique characteristics of credit unions - they are member run (through volunteer directors), cooperatively owned, not-for-profit financial institutions. To date, those remain the three distinguishing characteristics of credit unions - and continue to justify their tax-exempt status.
Like some bankers, Mr. Nadler seems to fear credit unions. What is puzzling, however, is why. From his article, it seems that the real source of Mr. Nadler's fear emanates from the realization that credit unions practice what they preach in offering their members the best possible service, and in providing their institutions with responsible leadership.
Sounds like a recipe for success. And, as Mr. Nadler and some bankers are decrying it, it is.
Patrick M. Keefe
Director of communication National Association of Federal Credit Unions Washington
Paul Nadler responds: If my column seemed to show disdain for the work that credit union leaders are doing to provide modern services like portfolio management for their members, I apologize.
My point was that credit unions are modern and professionally managed, and that community bankers should take their competition seriously.