Magazine article American Banker

Bankers Find Unlikely Ally Opposing Credit Union Bill

Magazine article American Banker

Bankers Find Unlikely Ally Opposing Credit Union Bill

Article excerpt

John U. Barker, a credit union executive in upstate New York, has made a lot of friends since writing about his opposition to the credit union bill.

Most of them, however, are bankers.

Shortly after Mr. Barker wrote a July 22 column for Credit Union Times denouncing the bill, elated publicists at bank trade groups here began faxing copies to reporters.

"We couldn't have said it better ourselves," said Monique E. Hanis, a spokeswoman for the Independent Bankers Association of America.

"The media was not really hearing from the full industry," said Virginia McGuire, a spokeswoman for the American Bankers Association. "You were hearing what the credit union public relations machine wanted you to hear."

Much like the bank lobby, Mr. Barker prefers credit unions to be small, simple, and conservative. His own-$23 million-asset Hudson River Teachers Federal Credit Union, Peekskill, N.Y.-does not offer credit cards, ATMs, or interest-bearing checking accounts.

What Hudson River does offer is higher interest on deposits and lower rates on basic loans than most other credit unions and banks in its area. That, he said, is what credit unions were created to do.

It is not the way the industry is going, however. Instead, Mr. Barker asserted, credit unions unwisely are trying to compete with banks. At the same time, he said, regulators at the National Credit Union Administration are forcing them to compete against huge, member-gobbling credit unions whose fields of membership often encompass an entire city, county, or metropolitan area. …

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