Banks should stop attacking credit unions

To the Editor:

I read with great interest Massachusetts Bankers President Dan Forte’s comments on the credit union industry and must set the record straight.

The bulk of Forte’s comments surround the issue of credit unions being able to do additional business lending in the community. Credit unions are indeed seeking the ability to do more business lending and are thrilled that U.S. Sens. Sheldon Whitehouse and Jack Reed have introduced legislation to help credit unions do so.

Forte misses the fact that credit unions are filling an important void in the small-business lending market. Unlike banks, which focus and specialize in large commercial business loans, credit unions engage in true small-business lending. In Rhode Island the average credit union member business loan is just $225,000. Nationally, the average credit union MBL is just $205,000. Forte also fails to note that banks dominate the banking market in this country with more than 93 percent market share. When it comes to business lending, credit unions have just 6 percent of the small-business lending market from depository institutions. Should consumers and small businesses believe that the country is better off with no competition?

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Forte also urges credit unions that want to do more business lending to convert to a bank to do so. I will make an offer of my own to the banking community. The Cooperative Credit Union Association will assist any bank that wants to convert to a credit union and move to our nonprofit cooperative structure.

It’s unfortunate that bankers continue to attack credit unions. We believe in having a strong banking system but also a strong credit union system. When both systems are strong, consumers and small businesses benefit.

Finally, the statistic that small businesses need to know about the intent and spirit of credit unions with small-business lending is this: A Small Business Administration study found that during the country’s financial crisis from 2007-2010, credit unions experienced an increase in small-business lending, while banks had a decrease. Credit union business lending was up 45 percent, while bank business lending was down 15 percent. Credit unions were there in the tough times. •

Paul Gentile, president and CEO of the Cooperative Credit Union Association.

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