WASHINGTON— While the banking industry trade associations continue their work to eliminate credit unions' tax-exempt status, they also continue to fail to acknowledge its economic benefits, according to a letter sent by NAFCU to the Hill.
NAFCU Vice President of Legislative Affairs Brad Thaler wrote in the letter the attacks also neglect to mention that the banking industry received tens of billions of dollars in annual tax breaks for the Tax Cuts and Jobs Act, and nearly one-third of banks are Subchapter S corporations that do not pay corporate income taxes.
"These annual tax breaks for banks far outpace the annual tax expenditure of the credit union tax exemption," noted Thaler.
NAFCU noted the banking groups have also called on Congress to question the impact of credit union's response through the Small Business Administration's paycheck protection program (PPP), but Thaler responded by saying credit unions often provided PPP loans to small businesses that had been turned away by their for-profit banks and he noted the average credit union PPP loan was half the size of the average bank PPP loan.
"Perhaps [Congress] should be asking the banks why this was," wrote Thaler.
‘Misleading’ Claims
In addition to efforts to also subject credit unions to the Community Reinvestment Act, banking associations are continuing to “mislead” lawmakers and the public with their criticisms of credit union-bank mergers, NAFCU stated.
“These mergers cannot occur without approval from both bank and credit union regulators,” added Thaler. “Bank and credit union mergers are typically a win-win for a local community that may lose its community-focused financial services, or even local employees and branches, if a national bank buys the local community bank.”