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Don't Bother Reading the Label

The banking industry continues to pursue its 'divide and conquer' strategy.

OUR ADVERSARIES IN the banking industry typically attempt to label credit unions of two kinds: those that are "true" credit unions and those that aren't.

What's so galling about this approach is its blatant attempt to divide the movement. It completely ignores the fact that credit unions of all sizes and memberships share the same structure-cooperatively owned, not-for-profit, volunteer-directed, and so forth.

Nevertheless, the banking industry continues to pursue this "divide and conquer" strategy, particularly aimed at labeling small credit unions (those less ominous to banks as competitors) as "true" or "traditional," and all other credit unions as just not making the grade.

Further, the bankers attempt to portray that only small credit unions serve those of modest means.

Small credit unions, which represent our roots, are vital to the movement. But that doesn't mean large credit unions (once small themselves, in nearly all cases) have lost validity. On the contrary, many large credit unions have well-developed programs for serving members and communities of modest means:

* Water & Power Community Credit Union, Los Angeles, used a grant from the National Credit Union Foundation to establish an affordable housing initiative. The credit union partners with the city housing coordinator to provide home-buying education for first-time purchasers. Meanwhile, the city grants interestonly loans to members for down payments.

* Anheuser-Busch Employees Credit Union, St. Louis, established a branch in a low-income area of the credit union's service area. Called American Eagle Credit Union, it operates as a branch of the parent credit union. The branch is headquartered in a former fast-food restaurant. It was obtained through a partnership with a local housing authority (De Sales Community Housing Authority), which purchases old buildings to rehabilitate or remodel, revitalizing neighborhoods or creating affordable housing.

* Dupaco Community Credit Union, Dubuque, Iowa, offers free "personal credit history" lessons to members. The service teaches members how to drive up their credit score and pay less in interest, fees, and other costs related to lower credit scores. The program aims to help members (and potential members in the community) cut costs, build savings, and improve their financial well-being.

* Langley Federal Credit Union, Hampton, Va., developed its own check-cashing program to counter predatory check cashers springing up around the Air Force base the credit union erves. Langley's "Quick Cash" program offers members comparatively lower annual percentage rates and even offers members the opportunity to borrow up to $1,000 for two weeks (the average loan, however, is only $250).

* Navy Federal Credit Union, Vienna, Va., the nation's largest credit union, has a program for members who have had problems managing their checking accounts. Dubbed "Fresh Start Checking," the program ties lessons about good money management skills to the reopening of checking accounts-particularly those by younger members of modest means. The program is offered only to members who have had their regular checking account closed due to mismanagement, such as if the account has been overdrawn for an extended period of time or has had excessive returned items.

Do these sound like credit unions that have lost their roots?

Certainly, these credit unions don't have a corner on serving members of modest means. In fact, thousands of credit unions-of all sizes and memberships-participate in special programs such as these and serve members of modest means as a daily part of doing business.

But these examples should make it clear to anyone-bankers, the public, and others-that credit unions can't be so easily labeled and divided.

DANIEL A. MICA is president/CEO of the Credit Union National Association.