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Two factors contribute to Jersey CUs battle with banks
HIGHTSTOWN, N.J. (5/19/11)--Two factors--credit unions' aggressive ad campaign and legislation seeking credit unions' participation in municipal deposits--are contributing to the attacks against credit unions by bankers in New Jersey through the media, said Paul Gentile, New Jersey Credit Union League president/CEO, after the latest volley of op-ed pieces. A letter to the editor from Gentile was published in the Trenton Times Tuesday and in Press of Atlantic City Wednesday--the latest of several letters the league has written to counter letters and op-eds from New Jersey Bankers Association CEO John McWeeney attacking credit unions' tax exempt-status. The banks "are responding to a very aggressive advertising campaign, New Jersey credit unions' Banking You Can Trust campaign," Gentile told News Now. "We're all over cable, radio, and newspapers, and New Jersey credit unions have received the most searches (to locate a credit union) on FindaCU.com the past three months. The campaign has very strong messaging, hitting bank fees and promoting credit unions as an alternative," he said. "Banks have gone to their association and said, "Credit unions are coming after us. What are you going to do about it?'" he added, noting that banks don't work cooperatively so their association has responded by writing letters in various media outlets in the state. The second factor--the municipal deposit legislation, which passed the state Senate overwhelmingly and is in an Assembly committee for negotiation--affects banks. Credit unions are seeking to participate in municipal deposits, which are controlled by the banks. "It's a $15 billion market and banks control it entirely, so we're aggressively pushing" to get the legislation through," Gentile said. The two factors "have put the banks on edge," Gentile said. He noted that banks also mention issues such as credit unions' member business lending and tax-exemption. "Credit unions have the high ground and shouldn't apologize for their tax exemption," Gentile noted, adding that credit unions return it to members in terms of better rates and lower fees while New Jersey banks made $860 million in profits in 2010. "We shouldn't feel sorry for banks. Credit unions have just 6% of the market." Other states might learn from what New Jersey is experiencing. "While it may look like we are playing 'defense' to these banker letter attacks, it's actually the opposite," he said. "Our 'Banking You Can Trust' consumer advertising campaign and our legislative push for credit unions to be able to participate in municipal deposits has spurred them to write these letters. "We welcome the public volley because credit unions have the public policy high ground. We are about helping consumers first, not shareholders. We only exist for the savings and lending needs of our member/owners. We have a powerful value proposition in these tough economic times and the bankers know it. We must keep relentlessly telling our good story. These public battles can only help to continue position credit unions as the good guys," Gentile said. To review the league's latest volleys in the credit union vs. bank debate in New Jersey, use the links.
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