A Professional Confessional

It's hard for me to write this, but yes, I belong to a credit union. The relationship began innocently enough when I was hired by the company. There it was, in the packet of welcome materials, the opportunity to join an organization dedicated to the mutual benefit of its members. What could be simpler?

I started with a credit card, and then moved onto stronger stuff: Checking. Savings. Line of credit. Internet banking. I even contemplated an auto loan. It was always easy to get someone on the phone, the rates were as good as they get, and fees have been minimal to nonexistent.

Consequently, I've stuck with them through episodes that would have made a commercial bank customer run for the exits. For instance, on Macintosh computers, the credit union's Internet banking software had, until recently, displayed important text as bright blue against a dark-blue background. Or there's the time I went to Boston's Barking Crab restaurant where, inexplicably, my credit card didn't work, placing my girlfriend perilously close to dishwashing duty.

This undiscerning consumer attitude poses a difficult problem for bankers. What can a for-profit commercial bank or community bank possibly offer to its retail customers that tax-exempt, not-for-profit credit unions wouldn't be able to imitate?

CREDIT WHERE CREDIT'S DUE

The answer starts with guaranteed innovation. Banks, not credit unions, are the ones forging new partnerships and alliances with airlines, retailers and e-commerce sites. Banks, not credit unions, have led the way in making branches more consultative and automated channels more useful.

And it's commercial banks, not credit unions, that must achieve world-class excellence in order to compete in the interconnected global economy. That won't be easy. While outside of the U.S., many countries have been known to establish regulatory policies that actually support domestic enterprises, here at home the law hobbles private industry with tax breaks to select competitors. Commercial banks at the backbone of the service economy have to battle for retail customers against tax-exempt entities offering similar services, thanks to the legislative cover of 501(c)(1) of the Internal Revenue Code and the Federal Credit Union Act.

So just to maintain parity with their putative public-service counterparts, for-profit organizations are forced to work either 30 percent harder or a whole lot smarter. But when an organization leads the way-whether it's a bank or a magazine-it would be nice if it could reap the full benefit.

I should really know better than to support progress' nemesis.