WASHINGTON (7/23/13)--Goliath. Meet David. He's not backing down.
In news publications across the country, commentators are comparing credit unions to the Bible's David, a young man with a small-but-true weapon who takes on a terrible giant who has hounded David's people.
Nowhere is this analogy more apt than in situations, like a recent segment on KETKNBC in Texas, where a single credit union advocate, Scott Rose, president/CEO of Kelly Community FCU, Tyler, Texas, stands up to the likes of the Texas Bankers Association to debunk misinformation they say the banks are spreading about the credit union tax status
Where the banks offer up the credit union exemption from federal income tax as a
Scott Rose, president/CEO of Kelly Community FCU, Tyler, Texas, tells KETKNBC that the credit union tax status is determined by the credit union difference.
solution to the country's budget deficit, Rose points out to KETKNBC reporter and anchor Roger Gray: "Credit unions in America have 6% of the financial pie. Banks have 94%. I dare say, that is not going to have a huge impact on the deficit."
And where banks say credit unions should be taxed because they offer a broad array of financial services to consumers, Rose points out that has nothing to do with the credit union tax status.
"We were created as a not-for-profit, financial cooperative," he told Gray. That is why credit unions were exempted from federal income tax 76 years ago and why the tax status remains good public policy today, credit unions say.
In other media coverage, a local news program on CBS-affiliate K21 News in Maryland also paints a darker image of the banks as they fight to add more taxes to credit unions.
"That image of starched, white-collared, cordial bankers is coming undone," the news piece says.
It goes on to add that, "Commercial bankers often complain to Congress about an unfair market advantage that credit unions have, claiming the non-profit cooperatives are a real threat.
"They say that at a time when some commercial banks are recording near record profits."
In fact, "(t)he number of credit unions has shrunk over the last several years," points out John Bratsakis, CEO of Maryland and District of Columbia Credit Union Association, who was interviewed in the clip. That decline has been particularly steep since the 2009 economic downturn, which, Bratsakis notes, credit unions, unlike banks, were not responsible for.
Bratsakis also clarifies the truth behind the credit union tax status--that it is "nonsense" for banks to say credit unions do not pay taxes.
"Credit unions do pay tax. They pay payroll tax, they pay property taxes that go to pay for those municipalities," Bratsakis told TV news reporter Kristine Frazao.