Executives within the financial services sector are good with numbers. In his July 27 opinion piece titled, “Credit unions waste taxpayer millions on lobbying, self-indulgence,” Peter Michelotti uses select numbers to try to paint a picture of a credit union industry that spends lavishly at the expense of its members. The letter cobbles together items, including “other efforts”, to arrive at a large number designed to catch the reader’s eye.

Michelotti references the Community Bankers Association of New Jersey, an organization for which there is little information available. Seeking clarity, I referenced the Independent Community Bankers of America’s website, which states “community banks are independent, locally owned and operated institutions with assets ranging from less than $10 million to multibillion-dollar institutions.” Using the same broad brush of nationwide examples Michelotti used, it would seem that local ownership is the key to the definition, as all but the four $1 trillion dollar-plus banks would fall within that asset range.

On ownership, a bank is a for-profit financial institution, with investors who profit from the activities of the institution. In contrast, a credit union is a not-for-profit financial institution with a volunteer board of directors elected from the membership in the framework of one member = one vote. Voting rights are not determined by the amount of shares owned. Credit unions’ members are the owners and net income is returned to them in the form of, on average, lower fees and better rates.

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