You're so cute in your defense of the CU industry Rainman...and wrong

And before I offer up my comments, let me once again say, that I strongly support the ORIGINAL intent of CU's: The Federal Credit Union Act. This act, passed by Congress in 1934 during the depths of the Depression, was intended to provide working-class Americans with credit "for provident and productive purposes" and to assist in the nation's economic recovery.

Given the stated goals of the CU's it made sense to offer the tax break, and over time, exclude them from CRA, but then the mega CU began to grow and grow and grow. Those CU's give the balance of CU's a bad name. Call them what they are, a BANK without taxes or CRA, which is basically a very unlevel playing field.

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I've got a pretty fair knowledge of the CU industry and I'm not aware of this CU. In fact, I'd be shocked if your statement were really accurate. Please PM me with the name of this CU and I'll do a little research. If I agree with you, I'll shut up.


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I am not allowed to "red line" (draw a line around a poor community and say "I won't bank there because these people are too poor") but a CU actually can.


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Due respect (and I do ) but you're just wrong! A community-charter CU has to have a defined geographical area that it serves. No regulator in its right mind will let a community CU draw communities in a way that excludes low-income areas. In fact, if you look at the NCUA regulations on community charters, it's much easier to show that your requested area qualifies as a community if it's a low-income area.

In all other respects, CU's are subject to the same "redlining" rules that your bank is. Neither occupational nor associational, nor community chartered CUs can redline low income neighborhoods.

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I'm suprised you've not heard of the 10th largest Fed CU in nation.

Membership requirements...know it snows in Alaska, or if you aren't aware of that, open your account at one of their Washington branches. They'll tell you about the snow so you fit in the "defined scope of membership or common bond".

Believe me, I watch their numbers. They rock in the high income mortgage lending game. In the rural communities however, I kick their butt...which is interesting, being that I'm the number 10 lender in the state for mortgage lending, and they're number 1....yet in low-income rural deals, (An area they claim they are focused on) I'm number one. I offer the ONLY First Account in the state to these rural areas (treasury department account with little to no fees for focus on LMI areas). Their consumer accounts are higher cost in these areas than my account.

If you dont' think they're focused on the high income market, hang out at the Petro club with me. I'll point you in the direction of their managers who are sitting there working the room. Or if that isn't enough, you could visit the Trust Company, or their Insurance Company...who focus on both consumer and large commercial insurance. Or perhaps you want a very large commercial real estate loan? See one of the top two lenders in our state...they just left banking to work for the CU's for profit lending company booking deals $1MM up. They don't talk to the poor people...working class, etc., but if you own an oil company, they'll buy you a drink at the club.

And I'm sorry, but redlining comes in all forms. They don't lend squat in the rural communities in comparison to me, and yet they're the number one consumer financial institution in the state. Why is it I do more, at lower rates, then they do in the very rural, off road system, areas? I don't have branches there either....in fact I have less branches then they do.

They don't have to lend here...they don't have CRA breathing down their shoulders, so why do what they can for these communities when they can refi the house belonging to the president of an oil company?

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These "huge salaries" you speak of are more the exception than the rule. Moreover, CU's don't have stock, so they can't give their CEOs stock or options as part of their compensation or retirement . Lots of banks do, and these comparisons of bank salaries with CU salaries don't take that into account. CU CEO salaries are set by the CU board, which is composed of CU members who get NO compensation for serving on the board. This serves as a pretty good check on CEO compensation.

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Not here Sparky No one is going to curb this CU. They dominate the political market here in Alaska. Their board and half of the politicians (I'm guessing low) are in the pocket of this CU because of their size. How well do they pay? Well two collegues of mine went over there. They were making in the ohhhh $160M to $200M range annually. They're doing better now, poor little darlings. You should hear what they offer their trust officer prospects!

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This argument cracks me up. Congress could have written a "means test" into the federal CU Act, but it didn't. I think it's pretty clear that Congress didn't originally intend for banks to be insurance agents, securities brokers, investment banks, etc., but now they are. If banks want to lecture CUs about "original intent," then banks should stick to banking. I know the ABA has sponsored some fluff studies to argue that CU's aren't serving people of modest means, but there are reliable studies that show the opposite. Most CUs still make lots of loans to people that banks wouldn't touch with a 10 foot pole.

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Back in the old days...they didn't need a means test. Back in the old days, we didn't need CRA. Now it's the new days....let's play fair and institute one. If they're meeting the "means" then leave them alone. If not, which you'll find with CU's in Alaska, Texas, Illinois, and a few other states dominated by them, then by all means let's change their charter and make them play with us...on the same play ground. Put their money where their mouth is...if they're everything you say, what the heck, a good test will prove it won't it?

And as to the bank expansion issues...scroll up...the CU's are playing in the same arena as us, they just get to do it cheeper, with less rules.

It's good to be handed a gun in a stick fight...just what we've done to our CU's in the competitive fight to survive in the financial world. I don't have a gun, but I do have a big stick, and I've already been sure to hit as many congressmen as possible with it. Problem is, this CU is standing behind them with her gun...and it's apparently more threatening than me All curtesy of the un-level playing field we are trying to share.

Wow, what a tirade! As an employee of the CU mentioned by Dawnie, I think it was inappropriate to specifically mention our name.

As mentioned be earlier posters, there is no resolution to this argument, so it is pointless to continue throwing out the disinformation.

I don't think it's a big secret AKauditor, but as a favor, I'll remove your CU name and let folks guess. It's not much different than saying "BofA" so I meant no particular offence to you, just telling the story.

Indeed, Dawnie, I am familiar with the CU you speak of. I know enough about it to know that you are just wrong about some of the things you so confidently proclaim as fact.

However, I did not intend for this to degenerate into an argument over one institution's practices and I regret that I egged you on in that direction. Much as I want to, I won't carry that argument on further, because I don't think it's appropriate in this forum. Suffice it to say that anyone who wants to do a fair analysis of this issue will have to go beyond the "information" you put out.

I will point out that I asked you to PM me with the name of the CU, not to include it in a public response.

You can quote the intent of the FCU Act all you want, but the fact that Congress thought FCU's would help make more credit available to people of modest means does not indicate that Congress only intended for FCU's to serve people of modest means.

Moreover, you can't find any rule in the FCU Act that says CUs can only serve people of modest means. If Congress had intended such a restriction, they would have put it there. They didn't.

OK. This thread has deteriorated into a spitting match. Valid and invalid points on both sides, and none of them are contributing to the information sought by the original questioner. So I am locking the thread, folks.