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Gose at Oklahoma GAC: The Rise of Bank Attacks
Wednesday, March 27, 2019 7:00 AM

Richard Gose at OK GAC

Banks are accelerating their attacks on credit unions and attempting to create deep divisions between credit unions and consumers and between small credit unions and large credit unions. Since they haven't made headway in the federal legislative arena, banks have taken their fight to the states, working with independent banking groups to attack the credit union tax exemption from the local level up.

Richard Gose joined Oklahoma credit unions for the 2019 Oklahoma Governmental Affairs Conference Monday to talk about how these attacks are taking shape and what can be done about it. Gose has been a political affairs and trade association professional for 32 years, and since 1998, he's worked for the Credit Union National Association where he's now chief political officer.

Gose said about 90 percent of credit union members across the country don't know that credit unions don't pay federal taxes. This is a critical vulnerability that banks are using to their advantage.

"If we haven't explained our tax exemption," Gose said, "banks will." And their explanation isn't factual or favorable to credit unions.

CUNA is engaged right now in battling banks in a number of states, using their 360-degree approach. In Iowa, Gose said, something that was an annoyance suddenly became a threat. Thwarting these bank attacks and disputing their allegations has cost the industry millions of dollars.

To see just how far into the mud the banking industry has trudged, take a look at "Explore Credit Unions," which shows every aspect of the credit union movement in an extremely negative light, including getting small credit unions to say it's a good idea to tax big credit unions.

Gose said credit unions should care about what happens to credit unions in other states because those battles will eventually wind up in every state. Banks and credit unions agree on lots of issues. "It's the issues that separate us that we need to put into the equation," he said.

In Illinois, about 40 percent of members know about the tax status, but only because of the battles with banks. Gose pointed to how fast legislation is now moving in Oklahoma due to changes implemented by the new governor and lieutenant governor. But what if something unfavorable gets on the floor? How fast would a tax exemption bill in the current Oklahoma Legislature get moved through the system?

CUNA got involved in a Kentucky campaign where 45 percent of all registered voters belong to a credit union, and of those 25 percent consider their credit union as their preferred financial services provider. In disputes between credit unions and banks in Kentucky, credit unions win about 46 percent to 32 percent. But below 40 percent and things would look quite different.

In some of the states, banks got a lowered franchise tax, so now the state needs to find the money it needs from somewhere else. "We don't want them looking at credit unions," Gose said.

Credit unions need to get out in front of these attacks and be proactive in shaping the messages in people's minds. Credit unions can win definitively in a number of areas. Who's better with financial literacy, for instance, than credit unions who have been promoting financial literacy since their inception? Credit unions can also point to structural differences, such as banks that are motivated by profits that go to shareholders, some of whom are out of state.

CUNA does research in individual states on issues and voters, which are different from state to state. States in deficit situations are lumping credit unions in with ideas for generating new revenue sources. Bankers are there whispering in their ears to encourage them, Gose said.

Credit unions must take advantage of social media to post regularly about all the things they're doing in their community. "It's credible news, you're an integral member of your community, and the price is right," Gose said.

One good reason is that banks use social media generously to push out their messaging. Media in all forms love a fight and will amplify a battle between banks and credit unions.