DENVER–Not surprisingly, banking industry representatives continue to praise a decision that stopped a Colorado credit union from purchasing a bank in the state.
As CUToday.info reported, the Colorado State Banking Board quashed the planned acquisition of Cache Bank & Trust in Greeley, Colo., to Boulder-based Elevations Credit Union.
In an op-ed published by the Colorado Bankers Association, its CEO, Don Childears, said the credit union tax exemption is costing the state $65 million in annual revenues.
“You read that right. The teen who scoops ice cream after school, the single mother working two jobs and the senior citizen who lives on a fixed income all pay more income tax than a $2-billion credit union,” Childears wrote. “And the state, whose budget is already stretched thin, is struggling to meet the needs of an increasingly large Colorado population, as roads and bridges need repair and expansion and schools must grow to accommodate new generations. It goes without saying that every dollar is needed.”
Childears went on to write that at the national level the CU tax exemption is costing the U.S. Treasury $2 billion annually.
A ‘Shopping Spree’
“Recently, credit unions have been spending their extra cashflow on a shopping spree snatching up community banks across the country – with the exception of one failed attempt in Colorado,” he stated. “Thanks to solid public policy and accurate interpretation, the state will continue to collect income tax from a northern Colorado bank…
“The banking industry had no quarrel with either Cache Bank & Trust or Elevations Credit Union; but banks continue to push for a fair and competitive free market in which all participants play by the same rules,” Childears continued. “…The justification for credit unions’ tax exempt status is that they are supposed to serve people with low and moderate incomes, or those who share a common bond, such as employment or residence. Simply living and working in a large county makes a mockery of ‘common bond.’”
Childears added that not only are CUs not paying taxes but “they also do not have the same level of restriction, regulation and transparency, which makes them susceptible to risky debt. Worst of all, taxpayers are paying for credit unions to grow bigger and riskier – and they have no say in the matter.”