We went live at America’s Credit Unions’ Governmental Affairs Conference (GAC) 2025 with Louisiana Corporate Credit Union (LaCorp) CEO David Savoie. He shared his true thoughts with The Credit Union Connection Founder/CEO Sarah Snell Cooke about Don’t Tax My Credit Union, small credit unions being “trotted out like Jerry’s Kids” on Capitol Hill rather than getting a seat at the table, the aging of credit unions and much more!
Savoie is not one to shy away from controversy, from compliance to defending the credit union tax exemption – you won’t want to miss this! WATCH!
Automated transcript appears below.
Sarah Cooke 0:00
Okay, Hello. Welcome to the GAC 2025. I am here with LaCorp CEO David Savoie. David, why don’t you give us a little introduction to the corporate and to yourself?
LaCorp CEO David Savoie 0:16
Thank you, Sarah. I’m David Savoie, CEO, Louisiana Corporate Credit Union, and we’re a corporate credit union or a credit union for other credit unions located in Metairie, Louisiana, and we serve about 100 credit unions in the state of Louisiana, helping them with investments, funds, transfer and credit needs.
Sarah Cooke 0:35
Right, and you’re looking to go beyond though. You had a few, few outside of Louisiana. So, you’re gonna expand. And so you have a lot of opinions about things I have noticed. So first, why would a corporate credit come to GAC? What is your purpose in coming here?
David Savoie 0:53
Well, first of all, we’re because we’re a credit union. We’re, the Federal Credit Union Act in 1934 you know, set out what credit unions are and and accordingly, we were charted as a state charter credit union, but not a CUSO, but actual tax exempt credit union. So that’s what we are. So you know, we should do everything other credit unions do with respect to lobbying and in all of these things. So that’s, that’s why we’re here.
Sarah Cooke 1:19
Awesome. And I know you have a particular point of view on the legislation that’s come up, the Board Member Modification, Modernization Act. Tell me, you wrote an op-ed for us, which I love, and everybody go read it. But tell me about your thoughts on that.
David Savoie 1:37
I think it’s well past due. I’ve often thought even before this came up, my first background out of college was working for a CPA firm and doing audits of corporations, not necessarily not profit, but regular for profit corporations. I noticed that the largest credit union, the largest Fortune 500 companies in the world meet quarterly, and that’s the requirement from the FCC. They have to produce quarterly financials if they’re publicly traded. Same time, when I was a new examiner at NCUA, which I did for 10 years, I, you know, Holy Rosary Credit Union, which was $50,000 at the time in Louisiana, what, met, had to meet every month. Yeah, so, and that was before the advancements in technology that we have now. So I think it’s, it’s past time to, you know, cut that back. I think a lot of it had to do with the fact that the loan application, small credit unions, would take loan applications and approve them once a month when, the credit committee met, or the board met. So it’s time to move that into the present day.
Sarah Cooke 2:44
Yeah, just like we did with the loan committee, as they’re mostly gone. And you also have a beef, if you will, with I’m going to read the numbers, NCUA’s 704.8k, rule, which limits credit unions, 15% of your average assets max concentration. Tell us about it. Talk about that.
David Savoie 3:09
Part 704 is the corporate credit union section of the NCUA rules and regulations. And there’s legislation that requires all regs to be reviewed by agencies periodically on a schedule, and this schedule is coming up for Part 704 this year, so it’ll be coming up for review. And as part of that, people can write in comment letters to the agency. And that is a thing that’s actually provided for by federal law. They’re not just taking comments out of the kindness of their hearts. They’re required to. And so we can write in, and we’re going to write in on that one, trade associations write in too. This is a particular section of 704, there will be a few sections we comment on, along with other corporates. But this particularly hampers us from doing business, and really affects us more than anybody because of our size. We’re the smallest corporate out of 11 when there were 34 corporates where we’re the smallest, which, if my math is right, that means that 23 corporates that were bigger than us are no longer here. So we survived the…
Sarah Cooke 4:13
There you go.
David Savoie 4:14
The post U.S. Central meltdown, and that this reg says no individual credit union could have more than 15% of our moving daily average net assets on deposit with us on any day, which means on any given day, some of our largest depositors have to move money out of LaCorp into, usually Federal Reserve excess bank accounts or the federal reserve account or bank account. So in nearly all cases, that money is going out of the credit union system instead of staying with us where we could use it to provide credit for credit unions with deficient liquidity, which you know is the primary purpose of a financial institution is move money from people with excess parties with excess liquidity to deficient. For us, that’s, that equates to about $25 million which hampers us, and it’s the only section the reg that does not have a de minimis dollar amount limit. So, what I’m, we’re going to comment on is that it should have a de minimis, we think $50 million and it could have some other limits too, but larger of $50 million or 15% of assets, or maybe 200% of capital. But it has to be a way for us to help our credit unions use us more easily as a correspondent bank. I was told that the original reason for the reg was after US Central failure, when they were doing the post mortem, they noted what a lot of us knew already was that some of the larger parties represented on US Central’s board would use the threat of withdrawn funds to try and influence board decisions. But US Central is not around anymore. The regulations don’t provide for a central corporate. I haven’t heard any reports of that happening since. I do think if it does happen, it could be dealt with as a supervisory matter. It’s almost, you know, civil violation as opposed to regulatory dollar amount limit. So that’s something that we’re going to ask our members to comment on, and we’re going to be putting some things out on this reg, because it in essence, you know, what’s it mean, the credit union, it gives you more choice. We’re right now. We’re offering the best rate on money market accounts of anyone in the country, as far as I know, and…
Sarah Cooke 6:35
Any of the corporates.
David Savoie 6:36
Any corporates, and as far as I know. And so you know, our credit should have a choice of putting that money with us if you wanna earn a higher rate. And competition is good. Competition raises all ships. So I think it’ll be a good thing.
Sarah Cooke 6:52
Yeah, yeah. And you guys, you serve credit unions of all sizes, obviously, but down in Louisiana, there are quite a few smaller ones.
David Savoie 7:01
Right.
Sarah Cooke 7:01
So you’ve been kind of working, partnering, partnering with the league to support its No Credit Union Left Behind program. So talk about what LaCorp is doing and maybe some future plans.
David Savoie 7:12
Yeah, yeah. Helping small credit unions has been the essence of what we do since we were chartered, because there’s so many, many small credit unions in Louisiana, and it just comes, it’s the air we breathe. It’s not a new slogan or movement for us. It’s just what we do every day. I particularly feel like this area is critical right now. I’ve been around the credit union business for going on, I hate to say, 40 years now, since 1987 and there’s always talk about consolidation and smaller credit unions getting smaller. I’ve heard that since my first year, but something’s different now. There’s a palpable difference in the air. I think it has something to do with disruption, you know, in government in general right now. And I do think that credit unions need to take a hard look at themselves. There’s a tendency of gatherings like this to congratulate each other, and that’s all well, fine and good and warranted, but there’s some issues that need to be faced. One of them is the credit union officials, employees. It’s an aging group, and we need to get used into it. And I know there are programs for that, but it needs to be, you know, fundamentally, what do we do to change that? To get younger members, younger employees, younger, younger officials. Taxation, you know, I think we need to go beyond slogans. The credit union difference is fine, but what is the credit union difference? What is the credit union difference when some of the largest natural person credit unions for branding and marketing purposes take credit union out of their name and purposely market themselves as ABC Federal instead of ABC Federal Credit Union. And how do you do that and still say you have a credit union difference? I don’t know. Small credit unions, I think we have a branding problem, and I consider our, we’re a small credit union. We’re a small corporate. Banks don’t use the term small banks. They use term community banks. Now, if we use the term community credit unions, that would be confused with Community Development Credit Unions, but…
Or community FOMs. Yes.
We need to, we need a better name. Somebody more creative than me needs to come up with better name.
Sarah Cooke 9:29
Alright, I’m on it.
David Savoie 9:32
And then taxation, you know, we need to take a look at where the money we’re saving at taxation is going and go beyond slogans to empirical, measurable proof of how the tax exemption helps members. If the corporate tax rate right now, the highest rate is 21%, then our members getting 21 cents more on every dollar dividends than they get from banks. I kind of suspect not, I hadn’t done a study, are they saving 21 cents per dollar on interest, on loans or fees? I don’t think so. I think be great for somebody do a masters theses, or discertation, but I think it needs some research, and then we need to take a hard look at it.
Sarah Cooke 10:13
Yeah, well, and so I was talking to Fort Randall Credit Union, which is out in South Dakota. They serve six counties that have a population of like this room, and they have a ,they have a Native American reservation there, and no bank is going to go out there and serve them, but this $42 million credit is going to do it.
David Savoie 10:14
Right.
Sarah Cooke 10:15
And that’s the kind of energy and the kind of work we need to be doing to prove that we deserve the tax exemption, to prove that, you know, small credit unions can thrive and survive. There is no problem with that. It’s just, I interviewed James McBride a couple, few minutes ago when you walked up, and his credit is just, I think, around 100 million and they’re doing some amazing leadership development, career pathing, all that kind of stuff to help develop their people. And, you know, so many small credit unions are like, I can’t do that. I can’t do that.
David Savoie 11:04
Right, right.
Sarah Cooke 11:05
So, you know, hopefully we get more cans, can dos, and continue to have the small credit unions, because they are very valuable, not only the credit union movement politically.
David Savoie 11:16
Yeah.
Sarah Cooke 11:17
We try, we put them out on Capitol Hill every year. But also they’re important to this Native American reservation, or, like, these people that have to drive two hours to get to a branch, and like, how do you electronically serve them?
David Savoie 11:30
That’s a good point. You know, I think we need to do more. We take credit small credit unions every time tax exemptions up for threatened, we take them out and we roll them up on the stage, like Jerry’s kids, and use them as an example. We need, we need to give them a seat at the table, not use them as an example and cast them aside, because there’s lessons to be learned from them by all of us. So I think we need to do more than have stories about this small credit and did this thing or that, and Bill is speaking in terms of dollars and cents in total. What are we doing for our members with tax exemption? How are they benefiting from…
Sarah Cooke 12:12
This credit union put $2 million in loans out more than they had the previous year. So, you know, they’re really working hard to grow. But so, as I always do, I give my guests the final thoughts. What is your last word you have to say for our credit union audience today?
David Savoie 12:26
Wow, I think I’ve touched on everything I wanted to say, but, you know, it’s just good to be here with credit unions, and I’ve run into so many people I haven’t seen in years. And you know, there is a credit union difference. It’s real. It’s not just slogan, and we need to, it’s incumbent upon us to find a way to communicate that in a way that a congressman or general member of the public can understand.
Sarah Cooke 12:50
Yes.
David Savoie 12:50
And I think that’s what we need to do. And I think, you know, gatherings like this are a good way to get focused on that. Excellent.
Sarah Cooke 12:56
Excellent. Thank you, dude.
David Savoie 12:57
Thank you, Sarah.