Things were really buzzing while we were “hiking the hill” in Washington, D.C. earlier this month. It seemed like just about every special interest or trade group in town was looking for face time with their congressional leaders, and there certainly was a lot of noise that we had to cut through. As our Dakota credit unions leaders were advocating to preserve our special tax status, to maintain the current interchange structure, protect data security, and supporting the SAFER Banking act, lawmakers were focused on trying to avoid a government shutdown. We are now less than one week away from the September 30 deadline, and even though a late hour deal is still possible, it appears that a shutdown is likely.
Shutdown Could Impact Nearly 14,000 Federal Employees Here in the Dakotas.
So, how will credit unions respond? Are we ready to step in and help government workers with paycheck assistance, loan modifications, or eliminating fees for those impacted? There are 5,417 federal workers in North Dakota and 8,458 in South Dakota alone. Across the country credit unions are once again stepping up to be the “financial first responders” and support our members and communities that will be impacted. We would like to know how you are supporting your members who are federal employees in your community. Please share your actions with us so we can track the #CUDifference here in the Dakotas and share this important data with our partners at CUNA.
Highlighting the credit union difference.
Prior to our recent Hike the Hill visits, bank trades blanketed congressional members with letters calling for the elimination of the credit union tax status. Along with that, there was an editorial published in the Wall Street Journal last week from the Tax Foundation’s President Emeritus claiming that the exemption should be reconsidered or eliminated because credit unions have shifted away from their original mission.
Credit unions responded, as did our CU advocates who came prepared to share our stories on how we continue to meet our mission in improving lives and advancing the financial well-being of our members and communities. As a movement, we need to stay vigilant in this argument – especially during these uncertain economic times. The credit unions’ response to the WSJ article is that we should never apologize for putting people and communities first. As banks leave communities behind, credit unions are stepping in to fill those voids. Unlike banks, credit unions share their members-owners’ goals of financial security and empowerment, and work to help all Americans.
Further, the WSJ op-ed had several inaccuracies and misleading claims. First and foremost, the op-ed clearly demonstrates a clear lack of understanding about the credit union difference and the fundamentals on which we operate. More importantly, the article’s assertion about the credit union common bond is factually incorrect. The credit union tax status exists due to their not-for-profit cooperative structure. Credit unions uphold the responsibility that comes with it by investing in their members and communities. They share their member-owners’ goals of financial security and empowerment, and work to help all Americans reach those ideals.
Another misconception stated in the article was that credit unions abuse their tax status by giving more people access to the benefits of membership. While banks continue to leave more and more communities behind, credit unions step in to fill those voids to give people more financial options – which in no way is a bad thing.
Policymakers maintain our tax status – and have done so for decades – because it is one of the best investments they provide to average consumers. The Joint Committee on Taxation estimated the credit tax exemption to be around $2.5 billion in 2022. However, it delivers nine times that amount in benefits historically, with direct benefits for credit union members (compared to for-profit banks) totaling $13.9 billion in 2022 alone. These benefits occur because credit unions deliver profits to members in the form of comparatively lower loan interest rates, higher savings yields, and fewer or no fees. The credit union presence in the marketplace also results in substantial non-member benefits; banks respond to credit union competition with more consumer-friendly pricing.
The op-ed article also shared concerns about banks selling their assets to credit unions. The bottom line is that these are not forced sales – community bankers strategically make these decisions, and communities then reap the benefits because credit unions keep their focus on the people and businesses of “Main Street.” In a survey conducted by Frederick Polling of banks selling to credit unions, 50% cited both keeping local branches open and preserving community service as reasons for the sale; another 89% said it would mean more local employees keep their jobs.
Despite other claims, credit unions have an enviable record of lending to those of modest means. Credit unions also step in during difficult economic times. More than simply dollars and cents, credit union members feel like their institution is a partner. A recent voter survey shows credit union members view them much more favorably than nonmembers view their banks and other service providers across 10 dimensions related to financial well-being, including those related to borrowing, service provision and community focus. Credit unions should never apologize for fulfilling their mission by putting people and communities first.
MonDak welcomes Minnesota credit union leaders.
The 2024 MonDak will look a little different this year! Since Las Vegas is hosting the 57th Super Bowl the second week of February, we have moved our event a month earlier to January 17-18. In addition, we are very excited to be adding Minnesota credit union leadership to our group! Since 2017, Dakota credit union leaders, along with CU leaders from Montana, have used the winter getaway in Las Vegas, Nevada, for a high-level educational and networking opportunity. Designed for senior management, CEOs, and volunteer board members, our event will once again offer an exciting, fast-paced two-day schedule of unique sessions. MonDak is an amazing educational opportunity for regional credit union leaders to collaborate and share ideas as they are guided by a professional lineup of top industry thought leaders. Registration opens soon and will be announced in the Memo, meanwhile, mark those calendars!
CEO Town Hall scheduled for October 24.
Our Q3 virtual CEO Town Hall is scheduled for Tuesday, October 24, at 3:00 p.m. (CT) and 2:00 p.m. (MT). We will provide important updates on legislative and regulatory advocacy as well as updates on Association activities and upcoming events. You should have already received an invite in your email inbox; if you didn’t receive the calendar invite, please reach out to me. I’m looking forward to connecting with you.
Holiday Sweepstakes kicks off in October.
Our annual CUPAC/CULAC Holiday Sweepstakes will be kicking off on Monday, October 2. As you know, we try to fund the total prize package of $5,000 with donations so we can retain more of the proceeds, which provides additional resources where we need it most: Advocacy efforts with our elected representatives. We are asking all credit unions and CEOs with signed permission agreements to consider donating. Click here to contribute. Eligible credit unions should have already received marketing materials, FAQs, and instructions via email as well as an individual packet in the mail. Please contact me if you want to learn more or need to determine your signed permission agreement status.
Successful merger for Voyage and First Century
Voyage FCU and First Century FCU have announced their merger is complete and was official as of September 1st. Both credit unions agree that combining their resources to build an even stronger financial institution will create new opportunities for their members’ financial success. Congratulations to Jeff Schmidt, Voyage CEO, and Jay Meyer, President of First Century, on their continued commitment to exceptional member service.
Small credit unions GAC scholarship opportunity
Last week, CUNA announced that registration for the 2024 Governmental Affairs Conference (GAC) is now open, and this week, they announced the launch of a new project called “Small Credit Union Blueprints for Success,” that asks credit unions nationwide to write detailed guides on how they’ve grown their shops. The submissions should include in-depth descriptions of how your credit union achieved success, to be turned into a compilation of strategies to share with others. The CUNA Small Credit Union Committee will select the best entries at the end of the process, and the winning entries will receive full scholarships to the GAC, including registration, airfare, and hotels. You can find more details and submission form here.
Survey and forums on proposed CUNA/NAFCU merger.
CEOs across the Dakotas received a survey last week to help shape the proposed America’s Credit Unions, should the merger be approved. I had a few CEOs reach out to ask if the survey was legit and if they should participate; the answer is yes, please participate. It’s important to collect feedback on the proposed merger and what products and services the new national trade association should offer. The survey seeks insights into credit union leaders’ expectations on timeline, focus areas, areas in need of transformation, communication preferences, and more.
As a reminder, Jim Nussle, who will lead the proposed America’s Credit Unions, is holding CEO virtual forums to listen to and learn from members’ feedback. Each forum will include a brief update on the merger followed by a Q & A session. Questions can also be submitted during the forum registration process. Please register for the hour-long session that best aligns with your membership status; if you are unable to attend a forum, please register for your timeslot and you will receive the recording.
Last Chance for New Ideas
Finally, this Friday, September 29 is the final day to register for the New Ideas Conference. We do have room for more attendees AND we have an outstanding lineup of speakers and presenters. Not to mention, a great destination event location at Cadillac Jacks in Deadwood, SD. Don’t miss out on this amazing educational and networking opportunity!
Have a great week,
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