Dear Diary... The David and Goliath battle being played out in the courts and the Congress between credit unions and bankers has an implication.

The implication being that you can serve God and Money. After all, doesn’t our Money have "In God We Trust" printed on it?

It has been said that money is the root of all evil. Perhaps the axiom is true. It certainly is true when money is misused; for example, the temporal act of usury is an evil. Usury is interest in excess of a legal rate charged to borrowers for the use of money. Unfortunately, humans who are subject to the root set "legal rates". What is needed is a moral interpretation of usury. For example, bank charges to access one’s deposits or fees charged on checking or ATM’s withdrawals should be usury. Since banks make money on the deposits (even overnight) they should not be allowed to charge "sly usury". Until Congress sees fit to enact legislation to protect consumers from "sly usury", our best place to "bank" is where there are no fees—credit unions.

My involvement with credit unions started almost immediately after college. I was working as an underwriter for State Farm Insurance in Berkeley. The local Bank of America declined my automobile loan without a co-signer--a usual practice in the 50’s—because I had no credit history. One of my co-workers suggested I go to "our credit union". I did and qualified on my own at a lower rate than at the bank. It was now my credit union. When I say, "my credit union" the connotation is different from saying, "My bank". "My bank," generally means where one transacts banking. "My credit union," means I own it. It is a cooperative and the money deposited is used for the good of its owners.

A Catholic Church formed the first credit union in the United States—the parishioners of St. Mary’s Church, Manchester, NH, in November 1908. Monsignor Pierre Hevey, Pastor of St. Mary’s Church, invited Aphonse Desjardins, who was active in the development of credit unions in Canada, to help form a cooperate bank. St. Mary’s Bank Credit Union is still helping the little guys save money and obtain the credit they needed to build homes and start businesses. Nowadays, credit unions also issue Visa/MasterCard, debit credit cards, and have electronic banking. In short, they have the same merchandise that banks have. So what is the big difference? The banks are for profit. They need big profits to pay their savers and stockholders dividends. They need big profits to pay their top management and boards of directors and offer golden parachutes. Credit unions, on the other hand, pay dividends only to their savers, have no stockholders, and have volunteer boards of directors. The credit unions have remained true to their motto: not for charity, not for profit, but for service.

At a time when big banks are posting big gains with a huge chunk of the financial pie, I can only marvel at the audacity of the American Bankers Association’s continuing fight against credit unions. It began when the ABA filed suit to block a federally chartered credit union from taking into its original field of membership other groups who do not have a credit union—small employee groups (SEG’s). The NCUA, an arm of the federal government that administers federally chartered credit unions, ruled that under the existing credit union law, the adding of SEG’s was permissible. The ABA disagreed. The Supreme Court ruled in favor of the ABA. Depending upon how that ruling is interrupted, the result of the Supreme Court’s decision could mean millions of credit union members would be forced to pay off loans from their credit unions and refinance them at a bank.

CUNA, the association of credit unions, immediately went to Congress to change the credit union law so there was no ambiguity. The law would specifically allow credit unions to offer membership to SEG’s. Millions of credit union members sent letters to their representatives and the bill, H.R. 1151, passed the House of Representatives, 411-8! The ABA must have been flabbergasted. They mobilized the only constituency they have: paid employees, shareholders that profit from bank stock, and some members of Congress who perhaps do not realize how organized is the voting power of credit union owners. The ABA then sent their members a grassroots kit that urges bankers to oppose any meaningful credit union reforms. Of course, the ABA supports their version of meaningful reforms. Meaningful to the ABA is that which prohibits or restricts credit union expansion. They also support legislation that would make it easier for credit unions to convert to banks. Talk about chutzpa!

When a credit union makes financial gains, it is passed on to the owners in the form of lower interest charged on loans, no fees for services like checking accounts, and higher interest on savings. When the banks make a profit it is passed on to the stockholders, management, and directors. Peter Sinton, writing in the San Francisco Chronicle, reported that Bank of America and NationsBank posted big gains "buoyed principally by higher fee income." Most bankers say that they need the fees to offset operational expenses. For example, during the same period, BofA’s salary expenses jumped $211 million to $1.05 billion. Drop by your neighborhood BofA and ask the clerk behind the counter how much of that he/she got. What? Your neighborhood BofA has closed? Well, the next time you are in Ho Chi Min City, ask at the new branch there.

Credit unions are beneficial to everyone. David Rockefeller, former chairman and CEO of the Chase Manhattan Bank, gave credit unions an unintended plug in his recent article in the Wall Street Journal. In an article defending the IMF, "Why We Need the International Monetary Fund", he wrote, "The IMF is the sovereign nations’ credit union." The same argument he uses to support the IMF for nations can be used to support credit unions for the individual. They are a temporal good. No matter what evil the ABA tries to sabotage H.R. 1151 in Congress will erase that fact. Good triumphs over evil says the God in whom we trust. We also know that members of Congress have to run for re-election and those who are not for us…

Fr. Joe Landi is a Parochial Vicar at St. Cecilia Parish, San Francisco, the Archbishop’s Liaison to the Charismatic Renewal, the editor of the San Francisco Charismatics and the Board Chair of the Sierra Point Credit Union, South San Francisco. Opinions expressed are his own.