PEWAUKEE, Wis. (4/16/10)--Brett Thompson, president/CEO of the Wisconsin Credit Union League, addressed the Wisconsin Bankers Association’s response to a league April 8 press release about credit unions’ successful efforts to accommodate member business lending (MBL) needs. “Credit unions are eager to be part of a solution that keeps small businesses healthy and that keeps people in their jobs. Banks want to prevent that--all to the detriment of the Wisconsin economy and working families,” Thompson said Wednesday. “It's déjà vu all over again,” he continued. “The Wisconsin Bankers Association (WBA) keeps repeating the same factual inaccuracies over and over, apparently believing that tireless repetition will somehow make the statements true and deflect attention from banks’ recent poor performance in serving Wisconsin’s businesses and working families. Instead, it just weakens their credibility even more.” WBA’s April 9 press release posits that credit unions do a poor job of serving the low-to-moderate income populations and have strayed from the mission they were given an expensive corporate tax subsidy to serve. The bankers say that “tax-paying banks do a far better job of reaching underserved consumer than credit unions.” WBA opposes the federal legislation to expand business lending that “the credit union industry is ill-equipped to handle increased commercial lending.” Thompson rebutted:
* Wisconsin credit unions’ business lending was not subject to any cap for credit unions’ first 70 years of existence. Since the cap was put in place in 1998, there has been no evidence of systemic risk due to credit unions’ business lending. * The league has data illustrating more clearly banks’ recent financial woes. In 2009, banks’ loan losses were 2.36% compared with 0.59% for credit unions. * Regulators and small businesses alike support lifting the cap because it is good public policy. There's no cost to taxpayers, and the banks are not providing a solution.
“It’s time we ask ourselves--who do we believe? It’s either banks, which generate record profits when the economy is strong but turn their backs when working families struggle, or not-for-profit financial cooperatives that support working families regardless of the prevailing economic conditions,” Thompson concluded.