ST. PETERSBURG, Fla. (3/19/15)--In a recent opinion piece on FloridaPolitics.com, columnist Peter Schorsch tears down arguments made by the Florida Bankers Association (FBA) recently promoting rejection of a bill that would allow credit unions to accept deposits from public sources.
Schorsch first dismisses the idea that credit unions should pay the same taxes as banks, pointing out that credit unions pay different taxes because of their not-for-profit, cooperative structure.
"If banks want to forego their profits" they can achieve the same not-for-profit tax status as well, he said, adding: "If credit unions have it so easy being not-for-profit, cooperatively owned financial institutions, why has no bank in Florida decided to forego their profits and convert to a credit union?"
Schorsch also argues that if credit unions were permitted to act as alternative depository institutions for public offices, it would only be in line with the other nonprofit organizations in the state that have relationships with governmental and public agencies.
"By the FBA's logic, the state of Florida should not be entered into the over 1,500 contracts with nonprofits that they currently do," Schorsch said.
Further, Schorsch points out the misguided assumption that the bill would somehow damage the state's budget.
"There are 25 states that specifically allow credit unions to accept public funds, and 33 that allow credit unions to become qualified public depositories," Schorsch said. "In none of these states has this ability hurt the state budget, caused banks to fail or led a budget crisis in a state Capitol."