An Unusual Perspective

By Laurie Stewart

Like many of you, I’ve been involved with my state bankers association and ABA a long time. I know that they value the same things I value at my bank: solid relationships, shared goals, a desire to serve and a diversity of perspectives.

Each of us has our own experiences and by sharing them, we deepen understanding, enrich important debates and strengthen outcomes. My own perspective and experiences are rather unusual, so I feel particularly compelled to share them when I feel it will make a difference. And making a difference is what I am most excited about when I think of my year ahead chairing ABA.

As the first in my family to graduate from high school—and college—you can bet I value the role education plays in one’s personal and professional development. It has made a tremendous difference in my life, and it’s an area I’ll be actively supporting in the months ahead.

As a bank leader who has often found herself the only woman at the table, I also have a passion for making everyone on a team feel welcome and heard. A diversity of talent, combined with a strong atmosphere of inclusiveness, leads to better decisions and makes for more effective leadership.

And as a person who hails from what some in my state like to call “the good Washington,” I understand how crucial it is to inform the “other Washington” about how policies play out back home.

Which brings me to what may be the most unusual perspective I have to offer to our industry’s deliberations—that of a former credit union CEO who is fiercely committed to bringing facts and reason to the debate about credit unions.

I became CEO of my institution when it was just a $38 million-asset credit union. Since that time, I ushered it through a series of charter conversions to be the bank it is today. Why? Because I knew the institution needed to grow and to do that it had to shed its common bond restraints. The alternative—to take advantage of our tax-free status at the expense of the communities that rely on tax revenues to grow—would be wrong.

That experience taught me both the value and the regulatory limitations of the credit union charter. Credit unions are supposed to be different from banks, but today that difference is all but disappearing, save for the stark contrast in the ways both are taxed and regulated. Even more troubling is a trend we have seen recently of credit unions expanding their businesses by purchasing banks.

Every time a credit union buys a bank, another taxpayer leaves the rolls. That means fewer businesses contributing to the tax base supporting our communities, which means less tax revenue available for schools, public safety and other public services.

I pointed out the consequences of this in an op-ed in my local business journal, noting that a 20 percent tax hike that was recently levied on service businesses—including banks—in Washington state to support higher education excluded credit unions. The tax was hinged on the theory that those who benefited from having college-educated workers should pick up a greater portion of the expense. Credit unions no doubt benefit from such a workforce but managed to pay nothing in support of it.

I wrote that op-ed because it’s important for policymakers to know that you can both believe credit unions have a role to play in today’s financial services industry and also believe policy changes are needed to ensure a fair, well-functioning marketplace that helps communities grow.

I encourage you to also share your experiences to inform and shape important debates affecting our industry. And I look forward to working with you as you do so.


About Author

Laurie Stewart, president and CEO of Sound Community Bank in Seattle, is the 2019-20 chair of the American Bankers Association.