WASHINGTON–In a letter published in the Washington Post, the president of the America Bankers Association has blasted Virginia-based Northwest FCU’s purchase of the naming rights to the home stadium of the NFL’s Washington Commanders, arguing that was never the intent when Congress provided credit unions with a federal tax exemption.
A spokesperson for one credit union organization called the ABA’s arguments “nonsensical.”
In the letter, ABA President Rob Nichols wrote that in the 1930s Congress exempted credit unions from paying federal taxes in return for providing basic financial services to people of modest means linked through some common bond, such as an employer, noting Northwest FCU was founded in 1947 to serve CIA employees.
“Yet, in pursuit of endless growth, many credit unions expanded their field of membership,” Nichols stated. “Northwest now offers membership through both multiple federal agencies and ‘hundreds of businesses and community organizations’ and offers to ‘help you find another path to membership’ for anyone otherwise ineligible.”
‘Beyond Statutory Mission’
Nichols said Northwest FCU isn’t alone in its deal, saying stadium naming rights and multimillion-dollar marketing campaigns are commonplace within the credit union industry.
“Absent regular congressional oversight, credit unions have expanded far beyond their statutory mission and nonprofit structure at the expense of their member-owners and American taxpayers,” Nichols stated. “The fact that a not-for-profit, tax-exempt credit union just spent more than $7.5 million to stick its name on our local NFL stadium should encourage lawmakers to continue asking tough questions.”
The Independent Community Bankers of America (ICBA) has issued a similar statement in the wake of the Northwest FCU/Commanders deal.
As reported elsewhere, the Senate will be hosting a hearing this week on tax policy and some expect at least one of the witnesses to raise the issue of the credit union tax exemption.
‘Funny to Me’
In response, Jason Stverak, chief advocacy officer with the Defense CU Council, said during a call with the media that the bank groups are “starting to weigh in with the nonsensical at best attacks on credit unions.”
“It's just funny to me, as important issues are facing this country, our banking friends want to be like toddlers in a sandbox trying to throw sand instead of looking at many of the issues that they have created,” said Stverak. “They don't seem to have any problems with the fact that Citibank…took the naming rights for Citi Field (home to the New York Mets) in 2009 and then right afterwards or during that time frame also took close $45 billion in bail out (TARP Funds).”
Other Bank-Named Venues
Stverak also pointed to the Chase Center in San Francisco (home to the Golden State Warriors); U.S. Bank Stadium in Minneapolis (home to the Minnesota Vikings) and Bank of America Stadium (home to the Charlotte Panthers) as examples of big banks that have bought naming rights while also receiving “bailout” funds from the federal government.
The banks are “trying to undermine the incredible amount of trust and support that people have in credit unions and we are confident that members of Congress and their staff as well as the American people see through it for what it is--an attempt to add to their bottom lines and to try to undercut credit unions and prevent us from serving our members,” said Stverak.