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Dill corrects misconceptions in Norlarco article
DENVER (2/1/08)--A Jan. 25 newspaper article that described the Denver-based Public Service CU as the "new owner" of troubled Norlarco CU brought a response from the Credit Union Association of Colorado (CUAC) in an editorial written by CUAC President/CEO John Dill. In the Jan. 30 editorial in Coloradoan, Dill corrects two points in the original article: the ownership point, and a statement by a college professor that Norlarco's problems in the Florida construction market would bring implications in the credit unions vs. banks battle and more arguments against credit unions' tax exemption. "First, there are no new 'owners' of Norlarco. The 'owners' of any credit union are the members themselves," wrote Dill, adding credit unions' management "work for the members of the credit union, under the supervision of a volunteer board elected by those same members." The members of Norlarco will now become members of Public Service CU with the same benefits of member ownership as before: better rates on loans and savings, and a focus on people, not profits, he wrote. Dill took exception to opinions expressed by Prof. Ron Phillips at Colorado State University that Norlarco's problems will be evidence bankers will bring up about credit unions' tax structure. "The failure of Norlarco--while tragic--has no big implications in terms of the long-standing animosity between banks and credit unions," said Dill. "Occasionally, a bank or a credit union will make a mistake, necessitating regulatory action. "Norlarco's problems were no mere misstep but resulted in the need to find entirely new management. That is unfortunate, but no more or less of a problem than bank failures, which have occurred more often than with credit unions and with much larger financial implications." Dill noted that from 1984 through 2004, Colorado had 82 bank failures that cost the bank insurance fund almost $5 billion. The overall financial services industry remains strong, he said, with credit unions' system one of the safest in the country. Credit unions "are more highly regulated than any other financial institution. No credit union has ever cost the American taxpayer one thin dime in terms of bailout or subsidy--something that can't be said about the banking industry," he said. "Banks view credit unions as a threat because we keep their rates lower, serve our members and they can't simply buy us to get rid of the competition. It appears the banks as an industry want to own the financial service marketplace, lock, stock and barrel. Credit unions believe that consumer should have the choice to become members… and reap the benefits of that membership." To access Dill's complete editorial and the Coloradoan's original article, use the resource links.


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