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Banks Trail CUs in Exec Pay, Loan Growth, Political Clout
Thursday, November 14, 2013 6:55 AM

An article in yesterday’s issue of American Banker asserts that banks trail credit unions in executive pay, loan growth and political clout. “Talk about a punch in the gut for community bankers,” writes Reporter Paul Davis.

Citing a recent study by enetrix, a Gallup division, Davis tells readers that credit unions with $250 million or more in assets are paying CEOs more than banks of similar size. For example, the median base salary of CEOs at banks with assets between $500 million and $1 billion was $221,000 earlier this year, he reports, compared with the $325,000 their counterparts at credit unions earned.

While loan growth at banks seems to be lagging, the Nov. 13 article states, “Total credit union assets at Sept. 30 rose nearly 5 percent from a year earlier, to $1.08 trillion, according to CUNA Mutual Group's latest Trends Report. Loans are on pace to increase 6.2 percent this year compared to 2012, Dave Colby, CUNA Mutual chief economist, told the Credit Union Journal, a sister publication to American Banker.”

Davis reports that bankers are finding it difficult to compete on price, and many say they are unwilling to compromise on credit standards. Many are content to “let their trade groups fight the good fight against credit unions' tax-exempt status, while doing what they can to educate customers and prospects on the issue.”

Community Bank & Trust President and CEO Stacey Bentley tells the American Banker that they are simply trying to spread the word that, as tax-exempt organizations, credit unions are not doing their part to boost the community.

"We are seeing ridiculous prices and less underwriting [discipline] from credit unions," Bentley says in the Nov. 13 American Banker article.