Berger rebuffs another banker attack on CUs
B. Dan Berger
Oct. 2, 2013 – NAFCU President and CEO Dan Berger – within minutes – met another banking industry attack on the credit union tax exemption Tuesday with facts and figures showing the value of the credit union exemption and the fallacy of bankers’ complaints about their own tax status.
American Bankers Association President and CEO Frank Keating on Tuesday wrote the leaders of the House Ways and Means Committee, and copied his letter to all House members, to repeat his industry’s longstanding complaints about the credit union exemption and the competition the for-profit banking industry suffers at the hands of the nation’s not-for-profit, member-owned credit unions.
Berger, in rebuttal, reiterated the following:
- The presence of credit unions generates economic benefits to Americans of more than $10 billion a year, according to findings of a study commissioned by NAFCU on the credit union tax exemption.
- Eliminating credit unions’ exemption would lead to the loss of 150,000 jobs from the nation’s economy each year, a reduction in GDP and a net loss of revenue to the federal government, also according to study findings.
- During the financial crisis, credit unions increased their lending to small-business owners as banks cut back, according to a 2011 report released by the Small Business Administration Office of Advocacy. The same study showed that banks’ business lending was largely unaffected by changes in credit unions’ lending to small businesses.
- Nearly one-third of banks are Subchapter S corporations and pay no federal corporate income tax. Credit unions pay many taxes, including payroll taxes and state and local taxes. Their nearly 96 million member-owners pay personal income tax on dividends received from their credit unions.
- Credit unions didn’t take TARP bailout money.
Berger asks, again, “If credit unions have such an extraordinary advantage, why aren’t banks lining up to convert to credit unions?”
Berger's letter to House Ways and Means Committee
NAFCU's economic study of the CU tax exemption