The long-running war between Utah's banks and credit unions is back in the public eye, but this time the Utah Department of Financial Institutions thinks the battle has gone too far.
The department wants the state's credit union trade group to stop running radio and television commercials that the regulating agency believes cast the state's banks in a bad light.
In a letter sent this week to Scott Earl, president of the Utah League of Credit Unions, and Howard Headlee, president of the Utah Bankers Association, the Financial Institutions Commissioner G. Edward Leary asked the league to pull the commercials off the air and requested that the bankers group refrain from mounting a competing ad campaign attacking the credit unions.
Earl told the Deseret News Thursday that the league has referred Leary's letter to its legal counsel, but until the lawyers say "pull 'em," the ads will continue.
"The interesting thing is that we ran the ad a year ago and got no complaints," said Earl, pointing out that several Utah banks have run merger-related ads.
"We took what we thought was a soft, gentle, but also fun, approach."
Earl said he was surprised by Leary's letter and asked the commissioner how many consumer complaints he had received. "I didn't get a good answer, but I doubt that there were any letters other than from the banking industry," he said.
The UBA's Headlee agreed that the banking community is "incensed" by the ads and that the commissioner's letter "accurately describes" the situation. "The ads are inaccurate and they are irresponsible because Utah banks are some of the healthiest financial institutions in the country," Headlee said.
Headlee said he was approached by a friend who is not in the banking industry and was asked, having seen the ads, if there was something wrong with Utah banks.
Headlee said he then called the commissioner and was told that the department and its legal counsel had already seen the ads and would ask the league to stop running them.
The commercials in question seem to be poking fun at bank mergers in general and perhaps the mega-merger of First Security with Wells Fargo in particular, although no specific corporate names are used. The ads attempt to portray credit unions as unchanging and reliable and the banks as running amok with merger mania.
One of the suspect ads centers around a group of workmen. A woman stops and asks what they're doing. They tell her they're putting up a new bank sign. She
responds that they put up a new sign the previous month and asks what the new bank will be.
The workmen tell her they can't say, but that there's a grand opening scheduled by the new bank and some lucky customer will win a free trip.
"I'll give them a free trip," the woman declares, then says she will take her money to a credit union, where she knows the institution's name and its employees know hers. One of the workmen agrees that's a good idea.
Leary's letter said some of the credit union ads end with a voice-over stating: "If you're still not convinced that Utah's credit unions are our most stable, enduring financial institutions, what are you waiting for . . . a sign?"
It's intended to be funny, but Leary is not amused.
"I am troubled by the message being sent about the financial condition or stability of (Utah) banks," he writes in the letter, noting that the word "stable" has several meanings.
"It can mean 'firmly established' or 'not subject to insecurity.' Applying these two definitions, the use of the word 'stable' in this ad could be characterized as derogatory where directed toward other institutions."
And the commissioner notes that "stable" also means "not changing or fluctuating." If that's what the credit unions are implying, then Leary has a truth-in-advertising problem with the commercial because, he says, there has been more merger activity recently involving Utah credit unions than banks.
"Since November 2000, the department has received or approved three applications for mergers between credit unions. In addition, the department has been advised that several more are waiting in the wings. According to our records, this level of merger activity among credit unions exceeds the current merger activity of banks."
Thus, "the fact that any person would engage in sending a statement that could be reasonably construed as derogatory regarding the financial condition or stability of any depository institution, portion of the industry, or contains an untrue fact, is of great concern to the department."
Earl said he didn't know how soon a decision would be made on whether to pull the commercials off the four local TV stations and several radio stations.
E-MAIL: max@desnews.com