I've found two interesting, and somewhat related, items on the Internet this week. The first is an article referencing regulator displeasure with a campaign put on by Texas Dow Employees Credit Union. Apparently the credit union put forth an effort to ease member fears about the safety of deposits--and the institution in general--with a dedicated website called www.tdecusafeandsound.org. Regulators, notably the FDIC and the Texas Credit Union Commissioner, felt that the credit union was suggesting that bank deposits were not as safe as credit union deposits. This led to demands that the credit union remove the site and the "offending" references.
The second item, featured boldly on the home page of CNN today, presents a detailed story on shady bank practices. The story focuses on two former employees who, I believe, worked for BofA. The tell of their efforts as employees, at the direction of their employer, to max out customer credit lines. They call it a great big con. In fact, the title of the story is "How banks sucker customers for big $$."
What I find so offensive here is that while certainly some entities engage in practices that I would consider borderline immoral, the tone taken by the story suggests these practices are more common than an aberration. In fact, these practices (if they are true at all) are decidedly uncharacteristic of most of the credit unions and community banks in the country.
That leads me back to the efforts of TDECU. I didn't see the site before its removal, but my understanding is that they were trying to suggest that their strategic decisions kept them away from taking the kinds of risks that are diving certain banks towards insolvency. Compared to such banks, the credit union is safe and sound. The regulators didn't like that, but I wonder where their outrage is when it comes to such news articles that paint a picture of an entire banking system built to gouge/sucker/rip off consumers.
Either regulators need to set the record straight for jaded journalists, or go easy on the banks and credit unions trying to keep their good names from faltering due to the actions of a few.
