The latest bank attacks on credit unions have a new level of hypocrisy previously unseen in the financial services sector, CUNA President/CEO Jim Nussle wrote in Credit Union Journal Friday. Responding to attacks on the tax status and emergency mergers by the big banks, Nussle pointed out the $21 billion windfall banks saw in 2018, and the recently announced merger that would create the sixth largest bank in the country.
Bloomberg reported this week that major U.S. banks saw a $21 billion decrease in their tax bills for 2018 due to the Tax Cuts and Jobs Act.
“Big banks didn’t invest that money in their own people. Instead they cut around 4,300 jobs last year. The ratio of bank personnel costs to bank revenue declined, as bank employees helped make more money for shareholders but got a smaller part of it. Banks didn’t invest it into communities. Lending growth was 1.3% slower than the previous year,” Nussle wrote. “The real winner of the bank tax windfall seems to be shareholders who got a $28 billion increase in dividends and stock buybacks in 2018.
“In sharp contrast, credit unions generate more than $17 billion in other federal, state and local tax revenue each year. Members see nearly $11 billion in savings, and even bank customers see $4.3 billion in savings due to competition from credit unions each year,” Nussle added.
Nussle also took bankers to task for attacking the emergency merger between PenFed Credit Union and Progressive Credit Union while BB&T and SunTrust were working on a merger to create a major bank with $442 million in assets.
He highlighted how the PenFed merger ensured 3,000 members of Progressive could continue to receive financial services, and the National Credit Union Share Insurance Fund was save from a loss that comes with a failed credit union.
“Unlike credit union emergency mergers, [the BB&T/SunTrust merger] is a win for no one — unless you’re a bank shareholder. Community banks are finding themselves increasingly squeezed by ever-larger banks, and they end up losers in a world with yet another too-big-to-fail bank,” Nussle wrote. “It’s quite a feat for the banking industry to advocate for the end of member-owned financial cooperatives as they reap 11-figure tax windfalls. Or to cry foul on an emergency merger that ensures 3,000 Americans can receive uninterrupted financial services while taking additional steps to harm community bankers.
“Unfortunately, like so much recent history involving the big banks, consumers lose once again,” he added.