Donovan: Communities win when banks sell to CUs
Banks’ misleading attack over bank sales to credit unions is harmful, CUNA Chief Advocacy Officer Ryan Donovan wrote in American Banker Wednesday. Donovan notes when banks sell to credit unions it’s generally beneficial to all involved.
“[W]hen a bank sells to a credit union, the branches almost always remain open; the bank staff generally keep their jobs; the customers become credit union members; and the credit union can do even more to advance the community. Everyone wins, except the bank lobbyists,” he wrote.
“When bank sales to credit unions are blocked, the bank might be left with a choice of selling to a larger bank that has no ties to the community or shuttering its branches,” it adds. “When these branches close, it increases the number of un- and underbanked people in our nation suffering from a host of inequities associated with limited or nonexistent financial access.”
Donovan cites his own firsthand experience what a “vibrant, responsible and forward-looking” financial services industry can to do improve peoples’ lives and says the bankers who decide to sell to credit unions make their decision with that in mind.
“One of the more bizarre parts of this misguided argument is that not-for-profit credit unions are taking tax-paying banks off the market, harming the economy,” he wrote. “What they don’t share is that nearly half of the banks that sell to a credit union paid no taxes in the year preceding their sale, whether because they were not profitable, invested in tax-exempt vehicles, or received other exemptions from state and federal taxes.
“That’s to say nothing about the 24.5% tax paid on the total transaction value in many of these sales. Each of these transactions generates revenue for the government — and in many cases, it is revenue the government wouldn’t otherwise have received,” Donovan adds.