Thank You Bank of America! Your Friend, Credit Unions

by: Hon. Daniel A. Mica, Principal, The DMA Group

I have written articles about “catching the wave” of public displeasure with banks, and using this momentum to increase awareness of the value of credit unions. As I predicted, our friends in the banking industry have continued to help us in our recruiting efforts with new fees, penalties and charges.

The National Credit Union Association recently released a report that credit unions added 667,000 new members in the first quarter to a record 92.5 million.  I suggest that while credit unions combined total assets top $1 trillion for the first time, that credit unions seriously consider investing in a national campaign to boost awareness and educate consumers as of the benefits of credit unions. As an aside, for those who might think that credit unions are getting too big the trillion dollars represents the assets of nearly all 7,000 credit unions, while nearly all of the largest top ten banks in the U.S. have reached or rapidly moving towards having a trillion dollars in assets for each of them.

Also just to clarify, during my fifteen years as CEO of CUNA I found that there are many bankers who do not share the goal of their zealot colleagues of putting credit unions out of business. In fact, every few years I sent out an open letter to all bank CEOs asking that they reconsider their opposition to “all things credit union.”  I urged that we work together to provide better services and meet the needs of bank customers, our members and consumers in general. America’s business and consumer financial service needs are such that there is absolutely room for banks to do well by their shareholders and credit unions to do well by their member-owners. I often received feedback from those letters from many bank CEOs who privately agreed that they wish we could find a way to all work together. Before I continue with my comments, I’d like to renew my semi-annual request to all bankers asking that they reconsider their anti-credit union stance which consumes so much of their time, money and energy. Constant strife does nothing to help customers or consumers or to break a fifty-year plus deadlock that dwarfs the current deadlock in the Congress.

As I was saying, now is the time for credit unions to take advantage of the continuing misguided efforts of our “friends” from the banking community.  According to a report released by the advocacy group Consumers Union, a survey by consulting firm cg42 found that one in five banking customers considered switching accounts but only one in 14 actually did make the switch in 2011. Why? Time and money.  When consumers were fed up with fees on their debit cards and checking accounts and wished to make the switch, what did they encounter? More fees! Consumers were charged as much as $55 to close their bank account. Coupled with the fact that opening a new account can take up to two weeks; the complicated, costly process intimidated customers who ended up staying with the banks that have a strong-hold on their money. Credit unions should be lobbying Congress and the Consumer Financial Protection Bureau to consider policy changes that would make switching financial institutes easier. Fighting for the rights of potential members is an excellent way to start the relationship on the right foot and highlight the benefits of belonging to a credit union.

Bank of America made headlines earlier this month, with plans to move their customer service call-center jobs to the Philippines, after laying off 30,000 workers last fall. This comes less than three years after they received a nearly $50 billion federal bailout of taxpayer money. To be fair the bailout has been paid back, but what about the consumers? What about American jobs? As unemployment rises to 8.2 percent, the banking industry is doing its part to diminish our work force. Currently credit unions are fighting to lift a cap on member business lending that could create over 140,000 new jobs, while the banks are spending a fortune lobbying to block this effort.

Here again is an example of the bank’s short-sightedness. There are tremendous benefits in terms of jobs, consumer spending and the economy that derive from successful small businesses. Growth in this area creates opportunities for all financial institutions. If history is any indication at all banks will continue to make 90% (or more) of the loans, usually the larger loans and credit unions will make 10% of the loans, almost always the smaller loans. It’s important that the American people know who is fighting for their jobs, for their wallets, for their livelihood.

Certainly credit unions owe a debt of gratitude (no pun intended) to the banks for forcing their customers to search out alternative financial institutions, and credit unions owe it to the American people to save them time, money, and from having to do all the research on the credit union difference. Let’s make credit unions a known entity by de-mystifying the cooperative movement and offering consumers the solution to their frustrations with the misguided efforts of other financial institutions.

Dan Mica, former head of the Credit Union National Association (CUNA), established The DMA Group as a means to combine a myriad of experience into a one-stop consultancy.  Elected in 1978 to represent Florida’s 11th district in the U.S. House of Representatives, Dan Mica served five terms before beginning what would become more than two decades of work in the world of non-profits and association management.

The DMA Group is a full-service consulting firm, providing the highest level of integrity and service through established practices and decades of experience.  www.dmagroupdc.com