I might have already posted this, but it’s important:
With fast-growing credit unions posing more formidable competition to banks, industry trade groups are pressing the White House and Congress to end a tax break that dates to the Great Depression.
“Many tax-exempt credit unions have morphed from serving ‘people of small means’ to become full-service, financially sophisticated institutions,” Frank Keating, president of the American Bankers Assn., wrote to President Obama last month.
“The time has come to abolish this exemption,” Keating said in the letter, which was part of a blitz that included print and radio ads in the nation’s capital.
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.
In a 2010 report on tax reform, the President’s Economic Recovery Advisory Board said eliminating the exemption would raise $19 billion over 10 years and remove the credit unions’ “competitive advantage relative to other financial institutions” in the tax code.
Credit unions said the effort to take away their tax exemption was simply an attempt to stifle competition and remove one of the only checks on bank fees for consumers.
6 thoughts on “Trying to crush the credit unions”
This would seem to be a case for Senator Warren to take up, but then yesterday I see this article and I wonder if the banking industry is trying to do a preemption, with a little flattery. The timing seems kind of weird:
I haven’t used a bank in years. I love my member-owned credit union. The predatory greed of the 1% is just relentless.
We have 6 megabanks and the Federal Reserve controlling our economy and we’re concerned about lots and lots of regional banks—-who surely don’t get any tax breaks——-and credit unions who do geta $1.6 billion dollar tax break? Those 6 megbanks could gobble up those many regional banks in a New York minute if they chose to. It’s the perception of reality that counts and not reality itself. And so it is with free market Capitalism.
As though the megabanks pay taxes. What they haven’t offshored, loopholed or cooked, they bonus out in executive compensation.
You always find things like this, things that matter in a big way, when I don’t see them yet on any other websites. Thanks for this one.
Also, makes me want to … well … guess I’m afraid to express outrage online these days. If they’re jailing teenagers for making jokes on Facebook, who can feel safe? But yeah, if I weren’t already afraid to express myself fully, this one really really makes me boiling furious.
I use credit unions too and they are life savers, absolute life savers.
Used this to put my Congress critters on notice.
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