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Berger blasts bank lobbyists for misleading comments on CU-bank mergers
In a new American Banker op-ed, NAFCU President and CEO Dan Berger rebuked bank lobbyists for misleading the public with their criticisms of credit union-bank mergers.
"Yet banking groups won’t make a peep about their $21 billion tax windfall they received as a result of the Tax Cuts and Jobs Act of 2017," said Berger. "Nor will they openly acknowledge how nearly one-third of U.S. banks enjoy Subchapter S status, thereby allowing them to distribute untaxed profits directly to their shareholders and avoid paying federal taxes."
Berger noted that in the consolidating financial services environment, "over the past two years, there have only been a handful of credit union-bank mergers, compared to nearly 400 mergers between banks. While not new, there has been much discussion leading to misinformation regarding credit union-bank mergers by the banking trade associations."
Berger cited several reasons that bankers' arguments are misleading, including:
- while credit unions have grown slightly over the past decades – a 2 percent increase in market share from 1992 to 2018 – big banks are devouring community banks ;
- the 15 largest banks have grown substantially since the financial crisis, even with increased regulation and some incurring billions of dollars in fines for consumer abuses; and
- the total market share of total assets of the largest 100 banks is 74.9 percent, crunching smaller banks down from 53.3 percent in 1992 to just 17.4 percent in 2019, according to recent data, while credit unions own just 7.6 percent of the market.
Berger credited banks' outrage to "[their] desire to increase their own profits by working to undercut a competing yet separate industry."
To read the entire op-ed in American Banker, click here.