WASHINGTON — With credit unions celebrating International Credit Union Day, a new survey released by the American Bankers Association has found U.S. consumers are generally “unaware of the differences between banks and credit unions” and believe credit unions should be “held to the same standards as the banks they compete with for customers every day,” according to the trade group.
The ABA said the survey, conducted on its behalf by Morning, found 62% of Americans believe Congress should examine whether credit unions are providing enough community benefit to warrant their existing tax exemption, while only 14% opposed such an examination.
‘Metamorphosis Alleged’
“Since Congress last convened a hearing on the credit union tax exemption in 2005, the credit union industry has undergone a metamorphosis,” Robert Flock, ABA’s vice president of strategic engagement, said in a statement. “Credit unions have a congressionally mandated mission to prioritize service to lower and middle income communities; however, they increasingly prioritize growth by advocating for changes to membership rules, raising money from investors, and even buying banks. American consumers agree that Congress should conduct oversight of the $2 trillion credit union industry to ensure that its mission - the justification for its tax exemption - aligns with its activities.”
The Findings
The ABA said its survey also found:
- Just 18% of Americans are aware that credit unions do not pay federal taxes, while 82% are unaware of credit unions’ tax status. “In fact, nearly a third of consumers mistakenly thought that credit unions do pay them. Nearly three times as many consumers believe credit unions should pay federal taxes just like banks compared to those who feel they should not (49% vs. 18%, respectively).”
- A majority of consumers also believe that credit unions should be subject to community reinvestment reporting requirements that “quantify their impact on all segments of their communities, including low- and moderate-income areas, just like banks are (53% in support vs. 15% in opposition, respectively).”
- Most adults “care if the business that handles their finances is regulated like a bank (65%), and the vast majority (80%) agrees that any business providing bank-like services to consumers should have to comply with the same rules and regulations that banks do.”
Other Questions Posed
According to the ABA, the following questions and responses were also gathered as part of its survey:
When asked, “It has been nearly 20 years since Congress last held a hearing to conduct oversight of the federal tax exemption that credit unions receive. Do you agree or disagree that Congress should examine whether credit unions are providing enough community benefit to warrant receiving a tax exemption?” consumers provided the following answers:
- Strongly support – 28%
- Somewhat support – 34%
- Somewhat oppose – 9%
- Strongly oppose – 5%
- Don’t Know/No Opinion – 24%
Best Description?
When asked, “To the best of your knowledge, which of the following best describes how credit unions pay federal taxes?” consumers provided the following answers:
- Credit unions do not pay federal taxes – 18%
- Credit unions pay federal taxes – 28%
- Don’t Know/No Opinion – 54%
Know the Differences?
When asked, “Knowing what you know about the similarities between credit unions and banks, which of the following comes closest to your view, even if neither is exactly right?” consumers provided the following answers:
- Credit unions should pay federal taxes just like banks – 49%
- Credit unions should not pay federal taxes just like banks– 18%
- Don’t Know/No Opinion – 33%
What is Your View?
When asked, “Knowing what you know about the similarities between credit unions and banks, which of the following comes closest to your view, even if neither is exactly right?” consumers provided the following answers:
- Credit unions should be subject to community reinvestment reporting requirements that quantify their impact on all segments of their communities, including low- and moderate-income areas, just like banks. – 53%
- Credit unions should not be subject to community reinvestment reporting requirements that quantify their impact on all segments of their communities, including low- and moderate-income areas, just like banks. – 15%
- Don’t Know/No Opinion – 32%
Closest to Your View?
When asked “Which of the following comes closest to your view, even if neither is exactly right?” consumers provided the following answers:
- I care if the business that handles my finances is regulated like a bank – 65%
- I don’t care if the business that handles my finances is regulated like a bank – 10%
- Don’t Know/No Opinion – 25%
Same Rules & Regs?
When asked, “Do you agree or disagree with the following statement? Any business providing bank-like services (i.e. checking and savings accounts, loans, etc.) to consumers should have to comply with the same rules and regulations that banks do.” consumers provided the following answers:
- Strongly agree – 53%
- Somewhat agree – 27%
- Somewhat disagree – 4%
- Strongly disagree – 2%
- Don't know – 13%
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