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La. league defends CUs vs. banks misinformation
BATON ROUGE, La. (5/5/10)--Credit unions earn their tax exemption every single day, said the Louisiana Credit Union League in a letter in Monday's The Baton Rouge Advocate. The letter is in response to one of two recent bankers' attacks in the media. The other attack was featured in the San Antonio Express-News April 21. The Louisiana letter, from Anne Cochran, president/CEO of the Louisiana league, responded to an April 26 letter, "Banker rips credit union tax breaks," in which banker Preston Kennedy calls credit unions' tax exemption "a drain on the economy." Kennedy's letter responded to a credit union's letter on the government's proposed Consumer Financial Protection Bureau ("Legislation could hurt credit unions," The Baton Rouge Advocate April 9). The banker's "assertions about credit unions in his April 26 letter are misleading and shortsighted," said Cochran (The Baton Rouge Advocate May 3). She noted that credit unions were granted a tax exemption based on their unique structure as nonprofit cooperatives, with volunteer boards. "Unlike other financial institutions," Cochran wrote, "credit unions exist to maximize service to their member-owners." At another point, she wrote, "Credit unions are exempt from paying corporate income taxes because earnings are returned to members, who are taxpayers themselves. They are not share-holders." As for the bureau legislation, "credit unions will continue to place the highest priority on service to their members. Credit unions are right for looking upon it with a cautious eye, out of their desire to ensure their members' interests are served," Cochran said. "During these times of economic uncertainty, credit unions in the Greater Baton Rouge area are emerging as quality, effective financial institutions for individuals and businesses to put their hard-earned money. They remain accountable to their members and are focused on investing in the neighborhoods where they do business, live and bring our kids to school. "Credit unions do not stop behaving like cooperatives once they reach a certain size," Cochran said. "Whether big or small, every credit union shares the same not-for-profit structure and orientation toward member service. Because of this structure, unchanged over the past 75 years, credit unions earn their tax exemption every single day." Earlier in the month, in the San Antonio newspaper, Steve Mack, CEO of a San Antonio-based bank, wrote that "taxpayers are subsidizing the credit union industry" because of their tax exemption" (San Antonio-Express-News April 21). His letter responded to an article written by David Hendricks urging Congress to expand credit unions' role (San Antonio Express-News April 7).
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