LANSING, Mich. (6/28/13)--The Michigan Credit Union League says claims by a letter from the Independent Community Bankers Association to Congress calling for a hearing on credit unions' tax status are "misleading, erroneous, and intended to simply improve the profits of banks."
League CEO David Adams sent a letter to U.S. Reps. Dave Camp (D-Mich.) and Sander Levin (D-Mich.)--the chair and ranking member of the House Committee on Ways and Means, respectively--and Sen. Debbie Stabenow (D-Mich.), a member of the Senate Committee on Finance, as well as every other member of the Michigan congressional delegation.
Adams noted that if banks convinced Congress to remove credit unions' tax status, "it would be extremely likely that most credit unions would cease to exist or would convert to bank charters, at a huge cost to consumers and small businesses." The letter was in response to a letter ICBA sent to the leadership of the House Ways and Means Committee.
Credit unions' not-for-profit cooperative structure has not changed, Adams wrote. The only way they can build capital is through retained earnings, he said, adding that federal credit unions and state-chartered credit unions in Michigan have volunteer boards of directors, every member has a single and equal vote, and credit unions are driven by member service, not shareholder profits. He called on Congress to dismiss the banks' request.
On Wednesday, in letters to President Barack Obama and leaders of the Senate Finance Committee and House Ways and Means Committee, Credit Union National Association President/CEO Bill Cheney deemed as "offensive" the tactics of banks and thrifts going to top policymakers to complain about credit unions' tax status, especially since "time and time again [banks and thrifts] have needed taxpayer-funded bailouts."
CUNA's letters were an immediate response to letters ICBA send the congressional policymakers and to letters that the American Bankers Association sent to Obama.
Cheney noted the tax status has positive benefits to everyday Americans, with evidence overwhelmingly indicating that credit unions fulfill the purpose of their tax exemption. They offer higher returns on savings, lower rates on loans and low or no fees--resulting in more than $8 billion in direct financial benefits each year to 96 million Americans who belong to credit unions. (See related story, CUNA Refutes Banks' Tax Attacks In Hill, White House Letters.)
Both CUNA letters include a white paper with more detail about the benefits consumers receive because credit unions exist in the marketplace. For more on the CUNA letters, use the link.