JACKSONVILLE, Fla.—Another banker is attacking the credit union tax exemption, saying CUs have become commercial banks and do not deserve the tax break.
Benjamin Bishop Jr., chairman of investment bank Allen C. Ewing & Co. here, shared a plan to convert credit unions to taxable commercial banks in an editorial in Ewing’s Florida banking industry update, the Tampa Bay Business Journal reported.
Bishop released the plan on Monday, the final day NCUA accepted comments on its MBL proposal.
There are about 6,500 credit unions with more than $1.1 trillion in assets and $6 billion in untaxed net income in 2014, including 225 credit unions that now have assets over $1 billion, Bishop wrote. The credit union industry now holds 8% market share of total deposits in the U.S. and is growing at a faster rate than the banking industry, he noted.
“Banks pay taxes up to 35% of their pre-tax income while credit unions pay nothing,” wrote Bishop. “It is an unfair financial practice and it is costing the Treasury approximately $2.5 billion per year.”