CU Tax Subsidy Going to Wealthy Savers

A Winston-Salem (NC) credit union's certificate of deposit promotion targets wealthy savers.

Allegacy Federal Credit Union is advertising in large bold font a seven-month certificate with an annual percentage yield (APY) of 1.15 percent for balances of $250,000 or more.

Buried in the fine print of the advertisement the credit union states that the seven-month certificate is a tiered rate account. The highest rate is only available for savers meeting the highest tier requirement. To get this favorable rate, funds must not come from an existing Allegacy account.

In addition, a minimum deposit of $1,000 is required to open this certificate. Unfortunately, a majority of Americans could not avail themselves of the lowest tiered requirement with an APY of 0.95 percent, because they don't have enough in savings to open the account.

While credit union industry's tax exemption is tied to its public policy mission to meet the financial needs of people of modest or small means, it appears that Allegacy is diverting its tax subsidy to wealthier savers.

This is another illustration that the credit union industry's tax exemption is poorly targeted and is going to people who don't need taxpayer subsidized savings products.

Below is the ad (click on image to enlarge).

Unison Credit Union Buys Naming Rights to Youth Baseball Complex

Unison Credit Union (Kaukauna, WI) paid $375,000 to Kaukauna Youth Baseball for the naming rights to the organization's new baseball complex in Harrison.

The funds will be used to build four baseball diamonds. The facility will also include a concessions stand, restrooms, batting cages, a pavilion, a playground and 220 parking stalls.

Read the story.

Kohler CU Buys Naming Rights to High School Gymnasium

Kohler Credit Union (Kohler, WI) will pay the Mequon-Thiensville School District $150,000 for the naming rights of the gymnasium at Homestead High School.

The naming rights agreement is for 15 years with signage both inside and outside the gymnaium.

The credit union will make payments in three increments of $50,000 to the school district in 2017, 2022, and 2027.

The credit union will also operate a branch in the high school, as well as an ATM. The credit union will support the school district's financial literacy efforts.

Read the terms of the agreement.

Read the story in the Milwaukee Journal-Sentinel.

Affinity Plus FCU Signs Multi-Year Marketing Agreement with Gopher Atletics

Affinity Plus Federal Credit Union (Minneapolis, MN) and Gopher Athletics announced the signing of a multi-year marketing agreement.

According to the agreement, Affinity Plus will sponsor signage beginning this fall at four University of Minnesota venues. Signage will be on display in the Williams, Ridder and Mariucci Arenas, and at the Sports Pavilion.

No financial terms of the deal were disclosed.

Read the press release.

TV Commercial -- Great Rates for Everyone, No Military Service Required

Pentagon Federal Credit Union (Alexandria, VA) is airing a commercial on CNBC, which makes it clear that the credit union was open to the public.

The commercial has the tagline "Great Rates for Everyone" and ends with "No Military Service Required."

If anyone can do business with Pentagon Federal Credit Union, then why should the credit union retain its tax exemption.

See the commercial.

A+ FCU Pays $300,000 for Naming Rights of Stadium Scoreboard

A+ Federal Credit Union (Austin, TX) has become the Platinum-level sponsor of the new Pflugerville school district scoreboard at Pfield.

The deal is worth $300,000 over 5 years.

Read the story.

Scott Credit Union Signs Sponsorship Deal with St. Louis Cardinals

Scott Credit Union (Edwardsville, IL) has entered into a three year sponsorship agreement with the St. Louis Cardinals.

The sponsorship agreement includes naming rights to the MVP Deck in left center field at Busch Stadium. It also includes scoreboard advertisements, sponsorship of the Cardinals promotional giveaway night on August 26, player appearances, as well as partnership with Team Fredbird at community events.

The press release did not include the price of the sponsorship deal.

Read the press release.

Alabama CU Regulator: Bank, Banker, and Banking Cannot Be Used in CU Ads

In a letter to CEOs of Alabama state chartered credit unions, the Alabama credit union regulator reminded the CEOs that Alabama state chartered credit unions cannot use the words Bank, Banker, and Banking in their advertising.

The March 17 letter was issued because the state regulator became aware of credit unions using these words in their advertisements.

The letter noted that "any violation of this prohibition shall subject the party to penalties of $500 per day up to a maximum of $50,000"

The state regulator wrote that the same restriction applies to any non-credit union entity using the term "Credit Union."

However, the regulator wrote that credit unions may use language to describe a specific product like e-banking or internet banking.

This prohibition does not apply to federal credit unions operating in Alabama.

Read the letter.

Charlotte Metro Credit Union Buys Naming Rights to Amphitheater

Live Nation Entertainment and Charlotte Metro Credit Union announced a multi-year agreement to name the Uptown Amphitheater the Charlotte Metro Credit Union Amphitheatre in Charlotte, NC.

Terms of the deal were not disclosed.

Read the story.

Greater Nevada Credit Union Buys Naming Rights to Baseball Field

The stadium formerly known as Aces Park in Reno, Nevada will be renamed Greater Nevada Field.

The agreement includes exclusive sponsorship and advertising rights and prominent signage on the ballpark’s exterior façade, the scoreboard in left-center field and numerous locations throughout the 9,100 seat ballpark

Outside of disclosing that the deal is for 15 years, the financial terms of the naming-rights deal between Greater Nevada Credit Union and SK Baseball, owners of the Aces and the ballpark, were not released, although naming rights deals for minor league stadiums tend to be at least six figures annually.

Read the story.

$2 Million Gift Gives USU Credit Union Prime Advertising Space at Utah State University's Stadium

The USU Credit Union, a division of Goldenwest Credit Union, received prime advertising space at Utah State University's stadium for donation.

The credit union has committed $2 million to the football stadium renovation.

As part of the agreement, the south and west concourses of the stadium will carry the USU Credit Union name.

Read more.

U.S. Eagle FCU Secures Signage Rights to New Mexico's Tallest Building

The Albuquerque Journal is reporting that U.S. Eagle Federal Credit Union has secured signage rights to New Mexico’s tallest building, the 22-story Albuquerque Plaza in Downtown Albuquerque.

The credit union will also open a branch on the first floor of the building.

The credit union has $855 million in assets as of the end of the third quarter.

The price and terms for the signage rights were not disclosed.

Read the story.

NEFCU Launches Anti-Bank TV Commercial

Newsday is reporting on a new TV commercial by Nassau Educators FCU (NEFCU) that takes a shot at bankers as uncaring.

The commercial shows three bankers dancing and singing "If I Only Had a Heart" from The Wizard of Oz.

However, after reading online reviews about NEFCU, a couple of the reviews of the $2 billion credit union would question whether this credit union had a heart.

Read the story.

Maine CUs Disingenuous "Own It" Campaign

The Maine Credit Union League has launched a disingenuous “own it” awareness campaign.

The campaign focuses on stories of various credit union members.

For example, one story is about a credit union member talking about the benefits of of mobile banking and remote deposit capture and another story is about a business owner, whose business is open late and being able to run to his or her credit union's ATM at any time.

However, these stories are not unique to credit unions. I can go to my bank's ATM any day or night.

Moreover, these stories have nothing to do with owning their credit union.

Outside of having the right to vote and a claim to the residual, if the credit union voluntarily dissolves (which is very rare), what do credit union members really own?

As I pointed out in a September 2009 posting, they own very little.

Two CUs Buy Air Time During Super Bowl

Credit Union Journal is reporting that two large credit unions are spending big to attract attention during the Super Bowl.

BECU, a $13 billion institution in the Seattle suburb of Tukwila, Wash., and $8.8 billion The Golden 1 CU, Sacramento, Calif., will run television commercials during Sunday's Super Bowl.

Both credit unions will have 30-second commercials air during local breaks.

I don't know how much these television ad buys will cost; but I figure that these ad buys must be expensive.

This begs the question -- is this the right use of the credit union tax exemption?

Read the story.

Everyone Can Bank Here

NRL Federal Credit Union of Alexandria, Virginia is advertising that “EVERYONE CAN BANK HERE.”

ABA wrote National Credit Union Administration Chairman Debbie Matz on December 15 urging NCUA to order NRL FCU to stop such advertising, reminding the agency of its September 2013 guidance to federal credit unions to avoid “overly aggressive marketing campaigns ... providing consumers with misleading information about single and multiple common bond membership requirements.”​

Read the letter.

Not in the Military, Not a Problem

The title of this post is a line from a radio ad from Andrews Federal Credit Union (Camp Springs, MD), which is running in the Washington, D.C. market.

It is clear from this radio ad that Andrews Federal Credit Union is saying it is open to the public at large and there is no membership restrictions.

The National Credit Union Administration (NCUA) in 2013 warned federal credit unions that advertising that anyone can join -- "without any qualifying language -- can give the impression that the Federal Credit Union Act’s single or multiple common bond requirements do not apply. When this occurs, the advertisements are inaccurate or deceptive."

It seems to me that saying "not in the military, not a problem" in a radio ad could be viewed as inaccurate or deceptive.

If credit unions are going to advertise that they are open to all, then Congress should revisit their tax exemption.

Security Service Advertising Large Commercial Loans

Security Service Federal Credit Union (San Antonio, TX) ran an ad in the September 28th Caller Times promoting commercial loans from $5 million to $50 million.

Business loans ranging in size from $5 million to $50 million are not small business loans.

Is the credit union tax exemption meant to subsidize multi-million dollar commercial loans?

Weokie's Troubling Car Loan Ad

I received the following ad about financing or refinancing a car loan through Weokie Credit Union in Oklahoma City (see ad below).

This ad is misleading, if not deceptive.

The ad states that you can defer making a payment for 90 days on this loan. It goes on to say in bold, large font that the 90 days no payment savings is $1,357.62.

However, a person, who choses to defer for 90 days making a payment on this loan, does not save $1,357.62 unless the credit union is making the first three payments on the loan, which I doubt. The member still has to make that payment -- it was just delayed.

Moreover, in the ad's fine print, Weokie states that if you chose to defer payment for 90 days, interest will continue to accrue during this time period. In other words, you even owe more in interest.

In addition, Weokie's ad is making a farce out of the membership requirement. Weokie will pay to open an account for you.

The ad says:

"Don't have an account? Don't worry...
WEOKIE WILL MAKE YOUR FIRST DEPOSIT INTO A NEW ACCOUNT."

I checked Weokie's website and the minimum deposit to open an account for membership in the credit union is $5. Don't you think that the person can at least deposit $5 into a savings account to become a member.

Radio Ad: Why Should You Pay More Taxes So Credit Unions Can Pay None?

The credit union industry is gathering in Washington, D.C., this week to lobby Congress for preserving its outdated tax exemption. To counter their efforts, ABA is running a drive time radio ad recorded by President and CEO Frank Keating as part of "It's Time to Pay" campaign.

Credit unions are “abusing their taxpayer subsidy, using their untaxed profits to buy huge corporate headquarters and naming rights to stadiums,” Keating says in the ad. “Ask yourself: why should you pay more taxes so that credit unions can pay none?”

Listen to the Radio Ad.