March 29, 2021

NAFCU gives lawmakers the facts in bankers' misleading attacks against CUs

Capitol HillBank lobbyists are continuing to push misleading attacks against credit unions to lawmakers, but NAFCU is setting the record straight by providing the facts on the benefits of the credit union tax exemption and more.

"While bank lobbyists once again funnel their resources into frivolous attacks during the pandemic, credit unions will continue to do what they do best: responsibly serve more than 124 million Americans, support Main Street’s economic recovery, and invest in community outreach efforts – all without having to be told to do so," said NAFCU President and CEO Dan Berger. "The truth is, removing the credit union tax exemption would lead to a $142 billion GDP reduction, costing $38 billion in lost income tax revenue and eliminating 900,000 jobs.

"Consumer choice and competition is good for economic growth, and consumers are making a conscious choice to seek out a cooperative financial services model where they have a seat at the table. NAFCU urges policymakers to outright reject any and all attempts to impair the good work of not-for-profit credit unions as they help their 124 million members."

Bankers have long tried to eliminate credit unions' tax-exempt status, failing to acknowledge its economic benefits and not disclosing that the banking industry received tens of billions of dollars in annual tax breaks for the Tax Cuts and Jobs Act and nearly one-third of banks are Subchapter S corporations that do not pay corporate income taxes.

In addition to recent efforts to also subject credit unions to the Community Reinvestment Act, bankers are misleading lawmakers and the public with their criticisms of credit union-bank mergers. NAFCU has consistently highlighted the discrepancies in bankers' arguments as they try to undermine the best interests of communities.

NAFCU Vice President of Legislative Affairs Brad Thaler sent a letter to the Senate Finance and House Ways and Means Committees to give lawmakers the facts behind bankers' attacks.

"First and foremost, it is important to recognize that bank-credit union mergers are voluntary, market-based transactions that require a community bank’s board of directors to vote on selling to a credit union," Thaler wrote. "These are not 'hostile' takeovers. The bank is the one that ultimately makes the decision to sell to, and merge with, a credit union.

"…Bank and credit union mergers are typically a win-win for a local community that may lose its community-focused financial services, or even local employees and branches, if a national bank buys the local community bank," Thaler added. "Credit union-community bank mergers often mean employees retain jobs and branches remain open with a focus on the members in the community."

Read Thaler's full letter hitting back at bankers' false narrative here.

Since the 2008 financial crisis, banks have been fined more than $243 billion for consumer abuses and risky behaviors that contributed to the crisis. NAFCU will continue to share credit unions' stories on Capitol Hill, touting how they support their members and communities in times of need.