Banks ought to win this legal battle

The Utah Legislative session is about to begin. We know this because the credit union-bank fight is going public again. Already, it's hard to get past more than three songs or one newscast on the radio without hearing the credit unions crusade their cause.

In a nutshell, the fight is about this: The banks think that big credit unions that look like banks, act like banks, talk like banks and do business like banks should be treated and taxed like banks.

The big credit unions disagree. Just because they're big and look like banks, they contend they should be treated like credit unions that look, act and talk like, well, like credit unions.

For a person like me, who has always paid more interest than I collect, I get a perverse sort of detached amusement in observing this high-stake battle. It's like watching a Donald Trump divorce — Who gets the Rolls? — or the latest Microsoft lawsuit. Or professional athletes threatening a lockout if they don't get a higher percentage from the owners.

It's easy to find yourself rooting for both sides . . . to lose.

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But greed, let's face it, is a big part of capitalism, and it isn't hard to understand why bankers are upset if they have to pay for things that the big credit unions do not have to pay for.

There are a lot of things banks do that annoy me to no end, such as charge for ATMs and bounced checks — and then there's the fact that they are always right when I think they've made a mistake.

But I can't help but think that they're also right in going to the Legislature and pushing for bills that will make credit unions pay similar fees for similar services.

In 2003, the Utah bankers thought they'd scored a victory when the Legislature passed legislation that created a nonexempt class of credit union, paving the way for Utah's bank-like credit unions to be taxed like banks. But the credit unions that were declared nonexempt responded by changing from a state to a federal charter, thus avoiding state jurisdiction and effectively taking all the teeth out of the legislation.

In the soon-to-open 2005 legislative session, all eyes are on recommendations from a state Financial Institutions Task Force that has studied the issue for the past two years.

The task force has submitted a resolution — House Joint Resolution 1 — to the Utah Legislature that, If passed, will be forwarded to the U.S. Congress, asking that federal legislators step in and resolve the perceived credit union loopholes once and for all.

Hence, the barrage of credit union ads urging the defeat of HJR1.

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