MONTPELIER, Vt. (8.7/12)--Vermont State Employees CU (VSECU) has fired the latest round in its battle with the state regulator over using the words "banking" and "[to] bank" for its marketing efforts--this time in an op-ed piece written by VSECU CEO Steven D. Post in the Vermont Digger (Aug. 5).
VSECU was issued a notice of intent to serve a cease-and-desist order by the Vermont Department of Financial Regulation (DFR) over the words, which the regulator said would confuse consumers, who might not understand they are banking at a credit union rather than a bank.
In the op-ed, entitled, "Post: Banking on common sense," Post wrote that the credit union "believes Vermonters are smarter than this" and that to believe Vermonters would be confused "is almost laughable, when indeed, the DFR itself regulates both Vermont credit unions and banks through its own office named the 'Banking Division.'
The Vermont Bankers Association (VBA) has "pressured DFR to take this action and has solicited support from at least seven banks in a letter-writing campaign to the governor, requesting that the administration support the action of the commissioner," Post wrote.
He challenged the DFR to demonstrate that the action "is consumer-focused rather than a reaction to the Vermont bankers." He noted the potential cost to Vermont taxpayers, "who could be left paying VSECU's legal expenses if DFR's position is deemed unconstitutional by the court."
"Banks and credit unions both bring value to individuals and communities. Both offer banking services such as deposits, saving, credit, mortgages, banking online, and much more. Our business model is fundamentally different and the VBA and the DFR know it," Post wrote.
The op-ed also discussed that comments attributed to the DFR commissioner that if VSECU uses the banking words, it should be labeled a bank, treated as a bank and taxed as a bank, which Post said is "a way of trying to back door the taxation issue, and it raises concern about the real motivation behind banker complaints. Is this about protecting banks and taxing non-profit cooperatives?"
Noting that the issue is "about being honest, open and clear about who we are and what we do," Post said the credit union has "never called ourselves a bank in any of our advertising. …I don't believe anybody could see, hear or read a VSECU advertisement and be confused about whether we are a bank or a credit union," Post said. "VSECU is proud to be a credit union."
To read the full opinion-editorial, use the link.