Two Boston credit unions fight over police!

Boston is legendary for its tribal brawls: the Irish and the Brahmins, city police against the state troopers, townies versus college kids. 

Add to that list: The City of Boston Credit Union and the Boston Firefighters Credit Union.

The two credit unions that serve city employees are battling about access to the money of some of the highest paid public workers in Boston: law enforcement workers.

Looking to grow its membership, the Firefighters Credit Union last year began courting law enforcement employees — police officers, sheriff deputies, county corrections officers, and state troopers — and in November received permission to expand from the state’s primary regulator, the Massachusetts Commissioner of Banks David Cotney. 

That ignited a turf war with the more established City of Boston Credit Union, which promptly asked a Suffolk County Superior Court judge to stop the firefighters from expanding. A hearing reviewing Cotney’s ruling is scheduled for Friday.

Tussles between competing financial institutions do not usually get this emotional. Banks typically fight for customers with better interest rates or giveaways such as grills and groceries, not by trading accusations of “heavy-handed tactics” and “false and misleading statements” over recruiting customers. 

The two sides have accused each other of distorting the facts and invoking the events surrounding the Boston Marathon bombing to promote their cause, and they have fired off angry letters to the state’s banking regulator. 

‘It is up to the consumer to determine which financial institution he or she wishes to use.’

“I’ve never heard of something like this before,” said Larry DiCara, a former city councilor and attorney whose memoir, “Turmoil and Transition in Boston,” was published in 2013. “This is an interesting battlefield. You could never guess they would fight over access to a credit union.”

The battle between the two has become so fraught that even the trade association representing credit unions in Massachusetts tried to intervene, to no avail. 

Not-for-profit credit unions took root in the United States in the 1900s as a way for working-class families to access affordable credit and avoid loan sharks. Massachusetts in particular was a launching pad for the credit union movement, with Edward Filene, best known for building the Filene’s department store chain, pushing laws to encourage these “people’s banks.” 

Many formed around employee groups, since that made it easier to use the worker’s earnings as collateral. Both the City of Boston Credit Union and the Boston Firefighters Credit Union have their roots in serving city workers. Neither are officially part of Boston government. 

The Firefighters union is the smaller, younger sibling of the two. It has just under 7,000 members and about $200 million in assets, compared with the 100-year-old City of Boston Credit Union, which has $320 million in assets, and 22,000 members.

But like many credit unions, these two have been pushed to expand beyond their traditional membership, as they have faced increased competition from banks, higher costs to provide new technology and products, and a deterioration in workplace bonds. This expansion has bristled banks, which argue that credit unions are getting bigger and moving away from their original mission but are still enjoying tax breaks as non-profits.

The City of Boston Credit Union has opened up its membership to people who live and work in Norfolk and Suffolk counties. In 2009, the Boston firefighters allowed any firefighter in the state to join, which brought in 400 new members.

The Firefighters credit union wants to expand further and thought law enforcement workers would be a good fit. The credit union estimates there are potentially 6,000 police officers, sheriff’s employees, and state troopers who could become members. 

Moreover, the union contends it has established an even closer rapport with law enforcement colleagues.

“Since the 2013 Marathon, there has been a new level of mutual respect and cooperation among the first responders,” with the firefighters credit union helping establish one of the first fund-raisers for bombing victims, according to its application to the state last year. “As a result, the credit union came into a point of prominence among the various police unions.” 

With law enforcement workers about 17 percent of its membership, the City of Boston Credit Union said losing them would “cause irreparable financial damage,” Stephen Green, chairman of the credit union and a Boston police officer, wrote to Cotney in November, according to court documents.

Green alleged the firefighters provided “a narrative, full of rhetoric, ambiguities, and outright false and misleading statements,” to win approval of its expansion plans.

The Marathon bombing reference struck a nerve among police members of the City of Boston Credit Union, which rallied several unions and advocacy groups, including the Boston Police Relief Association and the Boston Police Patrolmen’s Association, to its cause. Both wrote Cotney that they were happy with the city’s credit union. 

“We find the use of the Boston Marathon bombing to somehow say that the firefighters have become leaders in the Boston first responder community to be disingenuous at best,” the Boston patrolmen’s association wrote Cotney. “There were so many first responders and civilians putting themselves in harm’s way for the sake of others that day, to point to one group over any other for personal gain is beyond belief.” 

For its part, the Boston Firefighters Credit Union said it has received multiple requests from police officers to join. It accuses the City of Boston Credit Union of attempting to keep its monopoly on police officers, who account for a third of the institution’s loans. 

“That is a nice idea but it is clearly not in the best interests of the consumer to be denied the privilege of banking where they chose to do so,” said Firefighters Credit Union president John Winne, according to court documents.

Both credit unions and their attorneys declined to comment because of the ongoing litigation.

The firefighters union has yet to begin marketing to police officers because of the court action.

Cotney, too, declined to comment. But in his letter blessing the Firefighters Credit Union expansion, Cotney said competition is important for consumers. 

“Ultimately,” the banking commissioner wrote, “it is up to the consumer to determine which financial institution he or she wishes to use.” 

Deirdre Fernandes