Member Letter to Congressman Jim Greenwood

September 20, 2004

Representative Jim Greenwood
Washington, DC

Re: H.R. 3579

Dear Congressman Greenwood:

As a President of a $70 million mutual Savings and Loan Association, which is about to celebrate its 120 year anniversary of serving the working citizens of Bucks County, and personally as a real community banker in Pennsylvania, I strongly urge you to not support the bill known as H.R. 3579, the Credit Union Regulatory Improvements Act of 2003. Credit Unions from their roots were similar to mutual Savings and Loan Associations. Both institutions are mutually owned by their members and neither is owned by Wall Street or wealthy financial people. The major difference between Fidelity Savings and the Credit Unions is that Fidelity Savings financially support the United States and the Commonwealth of Pennsylvania by paying an effect annual tax rate of FOURTY-ONE PERCENT OF EACH DOLLAR EARNED, AFTER PAYING INTEREST TO OUR DEPOSITORS AND OUR OPERATIONS, TO THE U.S. AND PENNSYLVANIA TREASURIES in support our government and its programs.

As you may know, at one time Fidelity Savings was not required to pay Federal Income Taxes but over approximately the last forty years Fidelity Savings has shouldered its duty and responsibility, as most corporate and individuals taxpaying citizens in our United States. It is sometimes argued that Credit Unions are non-profits, if so, then their Boards of Directors and Officers should be held accountable and responsible for the ways they spend the not-for-profit Credit Unions funds for excessive and elaborate office building facilities, and executive compensations and benefit programs that maybe considered beyond non-profit conservative.

My desire is a level playing field among financial institutions, which must include community banks, community thrifts and community credit unions, each conducting business following a similar set of regulations. As a true community Thrift, I invite you to look within smaller community banks and community thrifts and see the financial burdens that are imposed on these institutions in the form of Federal, State and local taxes and the financial burden of monitoring Federal laws. The banking field must be level and fairness of operation currently does not exist. Fidelity Savings continues to conduct its primary business to serve the home buying community in Bucks County reach their dreams of home ownership.

H.R. 3579 drastically and unfairly expands the authorities of the credit union industry. It also expands that industry’s tax subsidy when the credit union industry is allowed to expand beyond its maturity without sharing in the responsibilities of a true corporate citizen. Credit Unions must be made to toe-the-line and shoulder the same regulatory and tax burdens as my traditional mutual community thrifts and community banks.

Community banks and thrifts are important to our communities and local economies; both provide needed financial services and are an integral part of the tax base. We make loans to first time homebuyers, meet consumer credit needs, help families pay college tuition, sponsor financial literacy programs, help start-up entrepreneurs establish their own businesses, promote community development, and pay taxes. It is truly inequitable that community banks and thrifts are forced to compete head-to-head with a new breed of banks operating as tax-exempt credit unions. Our economy is built on free and fair competition. However, the free market is being disrupted by tax subsidies provided to large, complex credit unions.

H.R. 3579 expands the credit union industry’s tax subsidy by doubling credit unions’ commercial lending authority. H.R. 3579 also dramatically weakens the capital requirements of credit unions, because it also raises serious safety and soundness concerns.

H.R. 3579 would benefit only the large, complex credit unions that seek to significantly expand tax-subsidized business lending at the expense of community banks and thrifts. In addition to placing community banks and thrifts at a greater competitive disadvantage, this bill would harm those credit unions that strive to adhere to their statutory mission of serving persons of modest means.

As a community banker in Pennsylvania and as a taxpayer, I respectfully ask for a level playing field. Please do not support or co-sponsor H.R. 3579. On behalf of Fidelity Savings and Loan Association of Bucks County, and its Board of Directors and our eighteen employees, I thank you for not supporting H.R. 3579.

Sincerely,

Michael J. Buchheit
President/CEO, Fidelity Savings and Loan Association