Banks attacking credit unions undermine America's civic sector, a group of policy-minded students and young professionals wrote in The Washington Times. The article responds to false bank claims made recently about the “cost” of the credit union tax status and bank sales to credit unions.
“The bankers’ attack on credit unions is misleading in its portrayal and misguided in its attack against the civic sector,” the article reds. “Credit unions may seem like an easy target since they can deal with large sums of money, but at their core they perform an important civic function. Policymakers should beware of unfounded attacks against their legitimate not-for-profit status for the sake of preserving American community spirit.”
The article adds that credit unions have never purchased a bank’s charter, which is illegal, but rather, what “has taken place about 35 times over the past eight years, each time upon the initiating decision of the bank as to who its board of directors chooses to sell the bank’s assets and/or deposits to, is not a credit union purchasing a bank.”
The group also cites CUNA’s response to some of these bank claims that the state receives revenue through the transaction via capital gains taxes and will continue to receive payroll taxes.
“Most importantly, however, credit unions and banks are different animals at their core, despite performing similar functions…Instead of existing to line their shareholders’ coffers, credit unions typically pass along what would be their profits by offering lower interest rates on loans, charging fewer fees, and offering higher APYs on savings accounts for their members,” the article reads. “Indeed, credit unions serve an important civic function for people who don’t want their money parked in a traditional profit-driven enterprise.”