Bansk Trying to Kill Federal Credit Unions

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Banks pushing for repeal of credit unions' federal tax exemption


Credit unions have been snatching customers from banks amid consumer frustration over rising fees and outrage over Wall Street's role in the financial crisis.

Now banks are fighting back by trying to take away something vital to credit unions — their federal tax exemption.

With fast-growing credit unions posing more formidable compe ion to banks, industry trade groups are pressing the White House and Congress to end a tax break that dates to the Great Depression.


Bankers long have complained the tax break is an unfair advantage for large credit unions. Now they see an opportunity to get rid of it as lawmakers begin work on a major overhaul of the tax code that is aimed at eliminating many corporate exemptions and lowering the overall tax rate.

The exemption cost $1.6 billion this year in taxes avoided and would rise to $2.2 billion annually in 2018, according to Obama's proposed 2014 budget.


The tax exemption is crucial to credit unions, which by law can't raise capital through public stock offerings the way that banks can, said Fred R. Becker Jr., president of the National Assn. of Federal Credit Unions, a trade group with about 3,800 federally chartered members.

"They'll have to convert to banks, which is what the banks want," he said. "Then they'd have, for lack of a better term, a monopoly."

A 2012 economic study commissioned by the trade group found that removing the tax exemption would cost consumers about $10 billion a year through higher fees and interest rates on loans, as well as lower interest rates on savings.

http://articles.latimes.com/2013/jul...706?ak_proof=1

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Credit unions fight back against tax repeal efforts

What the bankers fail to mention was that credit unions only hold 6 percent of all the financial assets in the United States while banks hold 93 percent. They also fail to mention that 96 million Americans are satisfied members of credit unions, and that for every dollar in new taxes the government might gain, it would be eliminating $10 of credit union member benefits.

The Federal Credit Union Act of 1934 established the tax-exemption status of credit unions because the structure and goals of credit unions are far different from traditional banks. All credit unions are designated as not-for-profit, which means any and all profits made are redistributed back to credit union members in the form of higher interest rates on savings accounts and reduced fees. They offer loans at the lowest possible interest rates because their mandate is to cultivate community development by assisting working families, low income households, small businesses and the middle class.

Credit unions, while offering an alternative to banks, also offer an important financial backstop for low income families. Despite what the big banks may profess, there’s a tremendous need for the lower fees and higher deposit rates of credit unions. For example, a recent report from Pew State and Consumer Initiatives found that approximately 12 million borrowers spend $7.4 billion on payday loans each year, saddling themselves with exorbitant interest payments that often drive them deeper into debt. Many people in our country still struggle and credit unions are a worthy option.

http://www.miamiherald.com/2013/09/0...tml?ak_proof=1

[m>s]

I always wanted to know how to sign up for one of these har har

[Blake]

Preemptive har. Smart play.

Har o l.

[TDMVPDPOY]

fck the banks, these are the clowns or the govt want consumers/depositers to buy insurance on deposits just in case u have another bailout scenario .....with this sort of , people might as well go hide their money under their beds