IOWA CITY, Iowa–Members of the Board of Regents for the State of Iowa are expressing concerns that credit unions and other organizations that share the name of one of the state’s universities could pose a reputation risk were one of those CUs to be part of some type of scandal or other negative publicity.
That includes the state’s largest financial institution, University of Iowa Community Credit Union.
While no such actual incident has taken place, Regent Larry McKibben said during a recent regents committee meeting that the issue was discussed, with regents worried over what a scandal at a credit union similar to those that have taken place at Wells Fargo might mean, according to the Des Moines Register.
McKibben said Iowans remain confused about the relationship between the university and University of Iowa Community Credit Union. "I’ve had clients ask me, do you take care of that as a regent?" he said, according to an audio recording of the meeting reported by the Des Moines Register.
There is no formal affiliation between the nearly $4-bilion credit union and the university.
McKibben said concerns were also raised over the use of logos, mascots and names associated with Iowa’s three state universities being used by credit unions and other businesses without paying licensing fees or being used as part of any comprehensive policy regarding such institutions that use
"A smaller and smaller percent of our membership that we serve today is directly affiliated with the University of Iowa," Jeff Disterhoft, president and CEO of the University of Iowa Community Credit Union, told the Des Moines Register. "So, the name itself, you could argue, may not reflect the membership for which we serve."
The Register noted in its coverage that the state’s bankers have also raised the issue. As kb-studio.ru reported, Iowa’s credit unions are currently fighting an aggressive effort by banks over taxation.
"We think it’s deceptive," John Sorensen, president and CEO of the Iowa Bankers Association, told the Des Moines Register. "Many Iowans who see the signage and the name associated with that credit union are confused about the fact that they do not have an affiliation with the university. These are business people, Iowans who have a good understanding of the financial community," he said. "And yet they still have the misunderstanding that when they do business with the University of Iowa Community Credit Union they are somehow helping the university or the Hawkeye athletics program."
Disterhoff told the Register the University of Iowa Community CU name can be a "double-edged" sword, saying some consumers appreciate the in-name-only affiliation with the university, but that benefit may cause confusion as the credit union expands its business beyond the orbit of Iowa City.
"I would think the University of Iowa name would not have the same cachet in Ames," Disterhoft said, referring to the city that is home to rival Iowa State University.
He also said the credit union sought to change its name in 2007 to Optiva Credit Union. But in a vote, members rejected that change.
Iowa is also home to University of Northern Iowa Credit Union in Cedar Falls. The former Iowa State University Credit Union changed its Greater Iowa Credit Union.