By Patrick Donovan
I feel compelled to respond to American Bankers Association president and CEO Frank Keating'sopinion pieceon 28 Nov 2012 denigrating Credit Unions.
Banks have been trying to eliminate credit union competition for years. Not by providing better service to consumers, but by trying to eliminate their credit union competition by using the legislative arena to prevent credit unions from adapting to a changing marketplace and economy. Several years ago the Gramm, Leach, Bliley Act “modernized” the banking industry’s operating environment by opening them up to a range of new powers, including owningreal estate and insurance companies that they had previously been prevented from doing. During that same time, credit unions have not hadthe same opportunity.
Banks most recent attacks against credit unions have been aimed at preventing credit unions from being allowed to provide more small business loans. Mr. Keating says that credit unions should not be allowed to offer business loans because credit unions were chartered to serve individual of modest means, not “developers of luxury condos and shopping malls.”
First of all, if Mr. Keating were to read the Congressional Record from the year credit unions were chartered, he would find that credit unions were chartered because specifically banks were not serving families of “modest means.” Federal employees at that time wanted a credit union because what the banks were charging them was usurious.
Quite simply, Mr. Keating is cherry picking and misstating facts to avoid the simple truth: Credit unions are working to support our small business owner-members who have been denied by local, regional and national banks. Credit unions are currently prevented from helping more small business owners have that opportunity due to the arbitrary lending cap.
