Chris Furlow

Chris Furlow
TBA President & CEO

Giving credit where credit is due

Community banks in Texas generated more approved PPP loans than all credit unions of the same asset category across the United States.

Elections are now just weeks away and debates are in full swing about who should get credit — or blame — for various issues. This year, however, the COVID-19 pandemic presents a rare opportunity to reset the discussion in the bank versus credit union debate and provide long-straddling elected officials and candidates with new facts.

It is well established that many credit unions are working their tax-exempt status to full competitive advantage. Large-scale credit unions have abused their status by abandoning the “common bond” standard. You’ve no doubt seen their marketing efforts to “everyone” in television ads and in sports stadiums.

And with no community reinvestment accountability, figures show the industry rapidly moving away from the low- to moderate-income communities they claim to serve for high-income markets.

Meanwhile, banks pay their taxes, they are accountable on community reinvestment and they go beyond compliance to serve the needs of their communities. But 2020 has drawn another key distinction.

When the nation needed help in crisis, who stepped up? Who put their personnel, operational resources, liquidity and reputations on the line? After expiring on Aug. 8, the Small Business Administration’s official PPP figures couldn’t have been clearer, particularly at the community institution level. Nationwide, banks under $1 billion in total assets generated more than $85 billion in approved PPP loans. Credit unions? Barely over $3 billion. In fact, community banks in Texas generated more approved PPP loans than all credit unions of the same asset category across the United States. With banks of every size leading the way, SBA data through July shows that 86% of the $40 billion in approved Texas PPP small business loans were for under $150,000. Of the more than 400,000 small businesses assisted, truly small businesses represent the greatest number of beneficiaries of what was overwhelmingly a bank-led effort that saved millions of jobs in our state.

Credit unions, meanwhile, continue to defend their unfair advantages by claiming that banks simply don’t want to compete — something that’s absurd coming from folks who will stop at nothing to guard their perks.

For example, credit unions are even fighting efforts to provide banks with rent parity on military bases where stronger competition and additional financial options for our servicemen and women are desperately needed. As of press time, TBA is working with the Fort Hood National Bank and the Association of Military Banks of America (AMBA) to fight for bank parity on the many military bases in Texas.

Texas banks have made a difference for our communities during the Coronavirus emergency by saving small businesses and jobs. In this election season, let’s educate officials and candidates about these facts to be sure that credit is given where credit is really due.