Friday, April 14, 2006

Wolf in Sheep's Clothing

I recently read a white paper that was published by Verity Credit Union’s bond broker, Performance Trust in Chicago. The gist of the paper was that there are many companies out there that offer products and services that ostensibly “help” us, while their main objective seems to be putting us out of business. PUT US OUT OF BUSINESS…YIKES!!

“Who might want to put Verity Credit Union out of business”, you might ask? The obvious answer is commercial and community banks, our primary competitors. There is a war being waged against Credit Unions right now by the American Bankers Association over our tax-exempt status. It hasn’t reached the headlines in Washington, but in other States, it’s front page news. I could go on forever about that battle, but I’ll save it for another posting.

I started to think about who Verity Credit Union partners with for various products and services and where I personally do business and found that, on a daily basis, the credit union and I help support those who would rather not see us around. Here’s an abbreviated list and what they do for us/me:

Companies that Verity Credit Union uses that competes with us:

U.S. Bank: Helps us clear foreign checks that are deposited by members.
Wells Fargo: Helps us by providing first mortgage options to our members.
Washington Mutual: Helps us by providing first mortgage options to our members.
Columbia Savings Banks: Helps us by processing business credit card transactions.
PEMCO: Used to help us by processing ATM and Debit card transactions. PEMCO has a direct to consumer mutual fund arm that competes with Verity Credit Union’s investment department.

Companies that Verity Credit Union uses that competes with us:

State Farm Insurance: Has a national savings bank and investment arm.
Wal-Mart: Has recently applied for a national bank charter.

Every time Verity Credit Union or I as a consumer do business with these companies, it puts profit in their pockets. They use this profit to market against us. Assuming that there is a finite amount of dollars that Verity Credit Union has available for all expenses, countering our competitors attacks leaves less money available to pay great rates on deposits and keep our rates down on loans.

As an officer of the credit union, I will be looking for alternatives for the above services that are not backed either directly or indirectly by a competitor. Sometimes it’s less convenient or outright hard, but it’s better than contributing to those whose aim is our demise.

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