John Sorensen, president and CEO of the Iowa Bankers Association, understandably was just doing his job as the chief lobbyist for his membership in his recent guest column (“Why Iowa’s biggest credit union should start apologizing,” Jan. 13). As a volunteer (unpaid) University of Iowa Community Credit Union board member, I would like to address a few questions that John raised.
Credit unions pay taxes — property, sales tax, employment taxes, etc. and a state tax on legal reserves that banks do not pay. Iowans are not “subsidizing” credit unions like John alludes to with his comments. Why is John attacking fellow Iowans for choosing a different financial partner than those he’s paid to represent?
Having previously served on the board of a community bank, and with my current service on a credit union board, I might have a unique perspective to comment on the differences in structures and operations. The “cooperative” structure of a credit union is the simple difference. Credit union members serve and support each other, while for-profit community banks operate to solely benefit the stockholders, the owners of the bank. This is not to say community banks and their owners are not good corporate citizens. As with credit unions, community banks support the communities they operate in.
My credit union board experience, and previous community bank board experience provides a clear understanding of the changing financial marketplace, and the challenges facing all financial institutions. Credit unions are not the critical competition to community banks, as John suggests in his article. Rather, shrinking markets, too much brick and mortar, online banking alternatives and the ever-increasing regulatory burden are the major culprits. John’s attempt to drive Iowa credit unions out of business will not solve the fundamental issues faced by his membership in Iowa.
Credit unions are cooperatively owned financial institutions contributing millions of dollars supporting the communities they operate in, while providing Iowans with needed products and services. This includes rural Iowa. Deposits from, and loans to, rural members stay in the community, helping residents and small business provide for a better future where they live. Credit unions are part of the solution for rural development as Iowa consumers win when there is cooperative choice and competition. John stated that community banks in Iowa control three-fourths of the marketplace, so how can it be that credit unions present unfair competition?
Concerning John’s comment regarding the Iowa Board of Regents “reprimanding” UICCU for “deceiving” consumers, John’s comment is apparently in reference to an individual Iowa Board of Regents member from Marshalltown commenting at a Board of Regents meeting, possibly representing his personal interests as a stockholder and board member of an Iowa bank, that in his opinion, UICCU no longer should be allowed to continue using the name of the university. Why an Iowa banker would use his position as a Board of Regents member serving all Iowans, including credit union members, to “reprimand” UICCU is an unknown.
All Iowans know people don’t choose a financial institution, including a credit union, because of its name; Iowans choose a financial partner they trust and who serves them well. Iowa credit unions must be doing something right because they are passionately serving and supporting 1.1 million members. Iowans serving fellow Iowans with the products and services of cooperative financial institutions have nothing to apologize for.
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• Loras Neuroth of Coralville is a UICCU board member and former community bank board member.