2-18-09 Update/message points on pending ABC News story on credit unions An ABC News investigative reporter/producer is working on what is expected to be a negative and likely unfair story about credit unions. The reporter did an “ambush” interview at a CUES meeting in St. Kitts two weeks ago after posing several days as a vacationer and filming some of the approximately 200 CU executives attending at poolside, on the golf course, etc. His angle: “Why are you here in this exotic location at same time you’re seeking for help from TARP?” This was the same reporter who uncovered the Merrill Lynch CEO extravagance (e.g., million-dollar makeover of CEO's office). ABC News has contacted CUNA for an interview and they have responded with a letter from Dan Mica. The program is expected to air next week. It is unknown at this time whether it will be on ABC's evening news program or on a show like “20/20" or "Nightline." In the meantime, below are talking points for you to have in hand. We will update these ASAP after the actual story airs, and we know more specifics about the content. Here are the key points: On TARP funds for credit unions: · Credit unions have received NO TARP money, and we are not seeking a direct injection of TARP money. · The only TARP money we are interested in is a “backup” to our self-funded deposit insurance system. · If it became necessary to tap the TARP funds—and we believe this is highly unlikely—credit unions would pay the funds back over time. On the state of the credit union industry: · Credit unions view TARP as simply backup assistance for a narrow segment of the credit union industry that has suffered collateral damage in today’s troubled economy. · But to be clear and it's important to emphasize that OVERALL, the credit union system is healthy and sound; consumers’ money is safe in a credit union. Deposits in virtually all credit unions are federally insured and backed by the full faith and credit of the U.S. government, just like at FDIC insured banks. · Credit unions didn’t make the toxic mortgages and liar loans that are at the root of the economic crisis. · Regular or everyday (“natural person”) credit unions, the ones where 92 million Americans save and borrow, are well capitalized and strong (nearly 11% capital-to-assets compared to a federal "well capitalized" requirement of 7%); · In fact, credit unions are actively lending when other financial institutions have cut back. Our industry loan growth last year, even amid a recession, increased 7.5%, suggesting more consumers struggling in today’s economy are looking for—and finding-- affordable access to credit at their credit unions. We are continuing to lend actively this year. · Many who attended the conference in the ABC News piece are board volunteers (credit unions do not have high-paid board members like banks), and used their own personal vacation time to attend. On the tactics of ABC News · The ABC News piece is ambush journalism, plain and simple. We are outraged that it has falsely impugned the motives of those in the credit union movement. · As cooperatives, we are owned and controlled by the members we serve. Our sole reason for being is member service. Credit unions are conservatively managed, and their earnings go right back to our members in the form of better rates and lower fees. · That’s why in poll after poll (e.g., Gallup, Consumer Reports, Forrester Research), credit unions consistently receive the highest scores in satisfaction and service. · The ABC News piece is not a representative view of our industry. It uses footage taken at one, small-scale industry meeting, planned three years in advance, in a location that is considered affordable. · The location was appealing, but that’s typical of any educational conference in any industry. Organizations, which put on these meetings choose locations that will attract attendance. Again, this meeting was planned three years in advance, well before the economic recession began. · When literally hundreds of billions in government money is being given to Wall Street and the for-profit commercial banking industry--- and Congress as recently as in a hearing last week (Feb. 11) raised legitimate concerns over whether all this money is being hoarded and spent on bonuses rather than loaned out to consumers—it is extremely disappointing that ABC News would miss the mark so broadly by focusing its resources on a segment of the financial services industry that has been all about doing the right thing for consumers.
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