TALLAHASSEE, Fla. – The Florida Credit Union League is not goingto let itself get pulled into a back-and-forth exchange withbanking watchdog Kenneth Thomas over an opinion article LeaguePresident Guy Hood wrote in response to an interview article withThomas in a recent edition of the South Florida Sun-Sentinelnewspaper that included misstatements about credit unions. “We'renot going to get into a tit for tat with this guy who obviously hashis own agenda,” said FCUL's VP Marketing and Communications MarkIvester. The op ed exchange between Hood and Thomas was touched offby a Q&A article the newspaper ran in its Oct. 9 issue based onan interview of Thomas by the Sun-Sentinel's Antonio Fins. Thomas,who has been a vocal observer of the financial services industryincluding commenting on bank mergers and financial regulations, wasquestioned on a variety of topics such as Fed chairman AlanGreenspan, his policy for the national economy, and the proposal toraise the FDIC limit from $100,000 to $130,000. Last year, Thomaspublished a study on Greenspan that he said suggested the Fedchairman was becoming too politically connected. Fins alsoquestioned Thomas about his support of legislation that would forcecredit unions to pay taxes and adhere to regulations similar to theones banks have to comply with. When asked whether such legislationhas a chance, Thomas replied, “It's very difficult, I'm told it'slike an apple pie issue. There is no way you're going to get creditunions to be taxed.” He continued to state that, “But it's not justthe lack of taxation. They don't have the regulations of theCommunity Reinvestment Act.and other things. It's really not alevel playing field. They have the deposit insurance, the federalinsurance. Remember that's the quid pro quo. That's the catch.That's why we can ask banks under CRA to lend to their entirecommunities, to do things that we don't ask McDonald's and othercompanies to do, because we backstopped them. We did it with theS&L crisis. We do it with the credit unions and we get nothingin return in the same way that we do with banks. That's wrong, andthat should be changed.” Thomas went on to point the finger at somebig credit unions in Florida he says look, act, walk and talk likebanks. “So they should be regulated like banks, and they should paytaxes like banks. And it's really not fair to Florida banks, or toany bank, that [credit unions] get this free ride.” In Hood's replyto the Thomas interview article that was published in the Oct. 24issue of the Sun-Sentinel, the Florida League president pointed outthat “Mr. Thomas neglected to mention that credit unions arenot-for profit.” As for Thomas' complaints that Florida has becomea banking colony – in his interview, Thomas discussed the bankingmerger scene in Florida by out-of-state banks – Hood wrote that “heneglected to mention that 100% of a credit union's deposits stay inthe area, and the benefits paid to members help bolster the localeconomy.” Hood corrected several other incorrect remarks by Thomas:* on CUs and CRA requirements, Hood stated that unlike banks thatcan lend outside their communities, CU can not. “Which is why it isridiculours to suggest credit unions need to be placed under CRA,”he writes. * on rising bank fees and service charges, “Mr. Thomasneglects to mention that credit unions charge dramatically less infees and that their very presence ensures lower fees, even fornon-credit union members who do business at banks.” Hood furtherstressed that, “Credit Unions don't need more regulation, they needa break from the regulations that try to stifle them now.Fortunately, nearly 100 members of Congress agree and havesponsored the Credit Union Regulatory Improvement Act (CURIA)).CURIA will give credit unions much more flexibility and freedom tobetter serve their members. We are hopeful it will soon beenacted.” In closing, Hood cited the efforts CUs and their membershave made to assist other credit unions and residents in the GulfRegion areas recently devastated by this year's hurricanes. On Nov.7, the Sun-Sentinel published Thomas' response to Hood's comments.He attacked the League president's commentary for using“mischaracterizations, misstatements and red herrings,” and deniedHood's accusation that he represents the banking industry “in itsongoing efforts to have credit unions subject to taxes andcommunity reinvestment regulations like banks. “Nothing could befurther from the truth, as Florida's bank trade association hasbeen highly critical of many of my comments directed toward theindustry over the years.” Thomas stated. Thomas cites, for example,that “Mr. Hood conveniently fails to mention that credit unions arethe only financial industry benefiting from federal depositinsurance that does not pay similar taxes or are subject to federalcommunity reinvestment regulations.” He counters Hood's descriptionof credit unions as being a “not-for-profit industry” by citingNCUA data that show the 222 CUs in Florida have a “whopping” $37billion in assets and reported “net income” of $319 million lastyear and $189 million for the first half of 2005. In his latestresponse, Thomas also talked about the recent hearing held in theHouse Ways and Means Committee to consider revoking the federalincome tax exemption for credit unions. Credit unions, he stated,can afford to charge lower fees “(and contribute more for lobbyingefforts), since they are, in effect, being subsidized by alltaxpaying individuals and companies.” Thomas said Hood also failedto mention that several of Florida's largest credit unions haveoffices in other states, “some as far away as Maine. This meansthey take deposits from and lend outside of the state, contrary tohis claim that 100% of Florida credit union deposits stay in thestate.” FCUL's Ivester denied any Florida credit union has anoffice in Maine. He told Credit Union Times that he personally wentthrough the League's database and “if there's a Florida-basedcredit union in Maine, then that's a surprise to me.” Ivester addedthat, “Mr. Thomas has his world and we have ours, and when hecrosses over into our world and doesn't want to listen to us, thenwe just have to move on.” -

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