WASHINGTON (6/27/13)--Credit Union National Association President/CEO Bill Cheney Wednesday called it "offensive" that representatives of banks and thrifts, "which time and time again have needed taxpayer funded bailouts," have gone to top policy makers to say that "the government can no longer afford the credit union tax status." Cheney fought off the most recent bank attacks in letters to President Barack Obama and to Senate Finance Committee and House Ways and Means Committee leaders.
The CUNA letters were in direct and immediate response to letters the American Bankers Association sent to the president and the Independent Community Bankers Association sent to the Senate and House tax policy makers attacking the credit union tax status.
Cheney noted the positive benefits the credit union tax status conveys to everyday Americans. The evidence overwhelmingly suggests that credit unions are fulfilling the purpose of their tax exemption, Cheney noted. Credit unions offer higher returns on savings, lower rates on loans, and most importantly, low or no fees--and these benefits, combined, result in more than $8 billion in direct financial benefits each year to the 96 million Americans who belong to credit unions, he emphasized.
"The benefits from credit unions translate into real money that boosts communities and which consumers and small business owners can put in their pockets to use as they need or want to," the CUNA CEO noted.
Banks in recent days have elevated their attacks on the credit union tax status, as witnessed by the ABA and ICBA letters urging Obama and legislators to examine the credit union tax status.
Cheney warned in the CUNA letters that banks want to come to Congress and talk about how credit unions keep banks from making more money off of American consumers.
However, Cheney said, "the question is not whether the existence of credit unions adversely affects banks and their shareholders, but rather whether credit unions employ the tax status to fulfill the purpose for which it was created: 'to make more available to people of small means credit for provident purposes through a national system of cooperative credit, thereby helping to stabilize the credit structure of the United States.'"
Credit unions' cooperative structure leads them to be more risk averse, and this, in turn, leads to a countercyclical lending effect that permitted credit unions to continue to lend during the banking crisis when other lenders evacuated markets or were otherwise unable to lend, Cheney added.
The CUNA letters also refuted incorrect banker assertions regarding credit union structure and membership.
"Other than the banking trade associations' tired efforts, there is absolutely no evidence to suggest that the credit union tax status is controversial," Cheney wrote. "What is controversial," he added, "is the bankers' suggestion that credit unions ought to be taxed, which would in effect raise taxes on 96 million Americans."
Both CUNA letters also include a white paper that provides greater detail on the benefits consumers receive as a result of credit unions being in the marketplace.
For the full letters, use the resource links.