Credit unions sprang from humble roots

After reading Shem Culpepper's letter in the April 20 Public Forum section of the Odessa American, I am compelled to respond.
Culpepper has taken an effort for improving credit unions' ability to better serve their members and turned it into an attempt to discredit and spread doubt about credit unions in order to prop up his argument to convert First Basin CU to a bank.

Culpepper let everyone know that his credit union could only hold up to $16 million in business loans under the 12.25 percent cap.
While that is true, he did not tell you that currently First Basin CU has only $5.3 million in business loans. Therefore, he can triple his holdings before hitting the cap.

That is assuming First Basin CU does not grow at all. In fact, First Basin grew 13 percent in assets during the first quarter of 2008. If First Basin continues to grow at that rate, it will be able to add $7 million a year in business loans to its portfolio. It only added $3.3 million in business loans last year, so I think it has room to grow.

Culpepper spoke of credit unions being taken into conservatorship due to bad business lending practices. Just for the record, credit unions rarely fail.

In fact, most credit unions nationwide are growing and prospering while many banks are reporting record losses due to overly aggressive auto and home lending practices.

As to the recommendations from the U.S. Treasury about consolidating all financial services under the Federal Reserve, Culpepper failed to say that leaders in the U.S. Senate rejected that suggestion right after it was made and it is effectively dead.

Credit unions serve a vital purpose in our community, which is often very different than that of a bank. For instance, credit union roots are in auto, home, personal loans and other services that help individual members. And they can make all of those types of loans that they wish.

Savings banks have some very tight restrictions on the dollar amount of those types of loans they can hold.

I, for one, believe in credit unions and the "people helping people" principle. And I believe that credit unions will continue to grow and thrive.

If Culpepper wants to see pioneering spirit, he needs only look at credit unions. Each of them has a story of how they were started in a company breakroom or in someone's living room. The founders of credit unions demonstrated pioneering spirit and innovation matched by few people.

Louise Smith
President
Permian Basin Credit Union
Odessa