The St. Louis Business Journal printed a letter to the editor written by Missouri Credit Union Association President/CEO Mike Beall in its March 2-8 edition. Beall is responding to an article printed in the February 10-16 edition, where Joe Stieven of Stieven Capital Advisors attacked credit unions and misrepresented efforts to deal with the corporate credit union crisis.
Beall’s letter in response appears on page 33 in the “Your Turn” section of the paper. Here is the letter in its entirety:
“Bankers Attack on Credit Unions Not New, Not Fair”
Bankers attacking credit unions is nothing new. After all, credit unions have been at the top of the American Banker poll for consumer satisfaction and trust for years. And our low fee deposit accounts and great rates on mortgages, car loans and small business lending are the envy of every banker.
Their main attack is predictable. Credit unions are not for profit cooperatives, so credit unions are owned by their depositors. That structure means credit unions return profits back to their owners in the form of the great rates that the bankers hate so much. They hate our great rates because they are out to maximize profits for the people who own the stock of the bank, not the average person with an account.
Even Americans for Tax Reform led by tax guru Grover Norquist says, “the only substantive difference between the tax treatment of banks and credit unions is the incidence of taxation, not the fact of taxation.”
But even credit union leaders took offense when Joe Stieven of Stieven Capital Advisors took a shot at credit unions in the Feb. 10 article in the St. Louis Business Journal, “First Community predicts windfall of lost profits,” because of the losses at a few corporate credit unions, which serve no consumers, but actually do the banking for credit unions themselves. The real irony is the Wall Street firms made big money betting on working families losing their homes in the Great Recession, the very same working families that credit unions have been lending to when the banking world walked away from lending to the little guy.
Double irony: the losses at those corporate credit unions stem from investments in mortgage-backed securities sold to them by Wall Street bankers. The losses at those corporate credit unions are being paid off by credit unions themselves over 11 years based on assessments made by the National Credit Union Administration – the credit union regulator, not by taxpayers. The NCUA has won a couple of recent lawsuits against Wall Street banks on investments sold to the corporate credit unions.
The real deal: People trust their credit union far more to shoot straight with them than a Wall Street guy peddling more spin from the financial crisis. Meanwhile, Missouri credit unions keep making loans at great rates to more than 1.3 million Missouri consumers. That’s where the real rub lies with bankers.
-Michael Beall, President/CEO, Missouri Credit Union Association