Credit Union Times - October 1, 2008 - (Page 3) NEWS Speed Calls FDIC, Texas CU Commission Claims on Ad Campaign ‘Laughable’ By MYRIAM DI GIOVANNI CU Times Senior Staff Reporter LAKE JACKSON, Texas — Texas Dow Employees Credit Union President/CEO Edward Speed was stunned, but not speechless, by FDIC complaints and a cease and desist order from the Texas Credit Union Commissioner regarding the CUs safe and sound campaign. ing out and being picked up by the wire service, the credit union logged over 2,000 calls and in-branch inquiries from members directly asking if TDECU was in as much trouble as the banks. “We waited to have the bankers put something out about how consumers’ deposits are safe, and they didn’t say anything,” said Speed. “We figured enough is enough and taped the commercials to reassure our members.” inflammatory in my assessment. Community banks have not played in this mess…and somehow all ‘banks’ are being lumped together with claims of ‘taxpayer bailouts’–once again?–and safety and soundness issues,” stated Williston. “Anyone with any intelligence is quite aware that there was never one single dollar of taxpayer money spent to assist the FDIC during the dark days of the 1980s…and indeed the commercial banks have paid dearly to cover the sins of the thrift industry…but I guess facts shouldn’t get in the way of a sensationalist marketing campaign. “Additionally, I would venture to guess that the community banks in Texas are certainly at least on par with the credit unions in terms of safety and soundness, and Wall Street doesn’t even know they exist. I believe this is entirely irresponsible and reprehensible behavior.” Upon being made aware of the IBAT’s concerns, Speed then asked Ensweiler to let IBAT know that TDECU would be happy to reshoot the commercials to include community bankers saying that their institutions are safe. “I thought it would be great to have a banker representative on air with us sending the message to the public that banks are safe, and we were willing to pay for the reshoot. It could have been done in one afternoon and would have simply taken a trip to San Antonio,” said Speed. “We never heard a word again from them about the campaign until we got the letter from the FDIC and Texas Credit Union Commission.” —mdigiovanni@cutimes.com [The FDIC] threatened legal and criminal action. It is just so ludicrous. The idea that this credit union is a threat to the stability of banking is laughable. —Edward Speed “They [FDIC] threatened legal and criminal action; it is just so ludicrous. The idea that this credit union is a threat to the stability of banking is laughable,” said Speed. “The genesis of our campaign started July 14, 2008, when The New York Times and The Wall Street Journal had headlines about the banking crisis and bailouts and urged people to make sure their deposits were insured. I was on my way to a Callahan’s conference that day and like many of us there, our phones started ringing telling us members were calling in panic.” He said within a week to 10 days of the articles comThe public education campaign was designed to spread the word about the soundness and stability of the credit union industry. The message revolves around the simple concept that members’ money and investments are safe–when trusted to credit unions. It didn’t take long after the campaign’s launch for Independent Bankers Association of Texas President/ CEO Christopher L. Williston to respond to the ads via e-mail to Texas Credit Union League CEO Dick Ensweiler. “My community bankers are having a fit over the media blitz by TDECU. It is clearly misleading…and Credit Union Trades Are Pushing For Help From $700B Treasury Plan WASHINGTON — Although most credit unions didn’t make the loans that helped trigger the housing crisis, they are trying to get access to some of the federal money being used to solve it. NCUA Chairman Michael E. Fryzel and lobbyists for CUNA and NAFCU worked to include credit unions in the $700 billion illiquid asset purchase program that was working its way through Congress at press time. Credit unions were mentioned in the versions being discussed on Wednesday. NCUA has not estimated how much in the way of illiquid assets credit unions currently hold. “While the NCUA has pursued aggressive regulatory and supervisory controls, and credit unions generally avoided the weak underwriting practices which contributed to the subprime crisis, the credit union industry is not immune from the effects of the prevalence of illiquid mortgage-related assets in the system. Those with concentrations of mortgage-related securities are finding it increasingly difficult to meet their members’ liquidity needs,” Fryzel wrote congressional leaders in urging that credit unions be included in the plan. On Wednesday, Treasury Secretary Henry Paulson told the House Financial Services Committee that the government “would use market mechanisms available to small banks, credit unions, and thrifts across the country–not just big banks.’’ “We are gratified at Secretary Paulson’s comments regarding credit unions. As we have noted, no one is immune from the current crisis and credit unions must receive parity with banks and thrifts for contingency purposes,” said NAFCU President/CEO Fred Becker. CUNA Senior Vice President/Chief Economist Bill Hampel said that credit unions were “collateral damage” in some parts of the country. The plan could “put the floor to their market higher than it otherwise could be,” he said in a conference call with reporters. CUNA and NAFCU were also working to ensure that the measure did not include a provision allowing bankruptcy courts to reduce homeowners’ mortgage debt. Several Democrats were circulating proposals to include such a provision. Paulson agreed with the trade associations’ position and told lawmakers “we oppose it on policy grounds” because it would take capital out of the system. CUNA is asking lawmakers to consider reviewing how the Financial Accounting Standards Board’s rules have contributed to the financial crisis. CUNA Senior Vice President/Deputy General Counsel Mary Dunn said the fair value accounting rules cause prices to be set artificially low for assets that would have higher values under normal conditions. —cmarx@cutimes.com NCUA OKs Regs on Advertising, FOIA ALEXANDRIA, Va. — Rules regarding flexibility in advertising for federally insured credit unions and the use of the Freedom of Information Act to attain information were clarified at last week’s NCUA Board meeting. The board unanimously approved the rule permitting federally insured credit unions to use the shortened deposit insurance statement alone or the official sign alone in advertisements. The regulation previously permitted shortening the official statement to “Federally insured by NCUA’’ if used with a reproduction of the official sign. NCUA Staff Attorney Moisette I. Green told the board that the change is in line with those the FDIC has for banks. The NCUA Board unanimously approved a rules change regarding when and how it would comply with the Freedom of Information Act regarding deceased employees’ personal information. The agency is continuing its practices of not accepting FOIA requests NCUA Chairman Michael Fryzel rises at the conover the phone. The board also approved clusion of his first board meeting where the board sending out for comment a considered rules on advertising and the Freedom proposed rule to allow those of Information Act. federal credit unions eligible for the Regulatory Flexibility (RegFlex) program to have six years to occupy unimproved land that they purchase. Currently, those credit unions must occupy those properties within three years. NCUA Staff Attorney Frank Kressman explained that the change would give eligible federal credit unions more time to make improvements on unimproved land they have purchased for future use. Hyland asked why the staff wasn’t recommending changing the rules so that they also apply to improved land. Kressman replied that including that kind of property “would almost be allowing for real estate speculation.” The public has 60 days to comment on the proposed regulation. The top regulatory lawyers for both CUNA and NAFCU praised the two new rules and the proposal. —cmarx@cutimes.com cutimes.com Credit Union Times, October 1, 2008 http://www.cutimes.com
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