MONTEREY, Calif.–Credit unions gathered here were cautioned the state-level bank attacks on the CU tax exemption being seen in other parts of the country will likely be coming to Sacramento and Carson City.
During the California and Nevada leagues’ REACH Conference here, Diana Dykstra told attendees, “If you don’t think we’re going to have a problem with bankers, it’s coming our way.”
Dykstra, who noted if California and Nevada were a country it would represent the third-largest credit union movement in the world, after the rest of the U.S. and Canada, said the bankers’ plan is to succeed with taxation on state charters to force a switch to federal, and then take the fight to Washington.
As CUToday.info reported here, the Independent Community Bankers of America’s (ICBA) new “Wake Up” campaign attacking the tax exemption includes state-level resources for banks to use.
Head-Scratchers
Dykstra told the meeting she has had to scratch her head over numerous statements and positions taken by the banking industry, including:
- Credit unions already pay $17.1 billion in various taxes each year.
- The American Bankers Association has stated a “community cannot be a common bond.” “A community is who and what we do,” said Dykstra.
- Dykstra said she wasn’t sure how to respond after bankers suggested credit unions had “lost their way” by making home loans.
- Dykstra said one real head-scratcher from the bankers has been a statement credit unions no longer deserve the tax exemption because some now provide wealth services. “What that means is we have helped members save enough” to need wealth management, she said.
What the Data Show
The effort by community bankers to attack credit unions is really misplaced, according to Dykstra, who noted in 1992 big banks held 41% market share, community banks held 52%, and credit unions 6%. By 2019 the big banks were even bigger with 76% market share, while community banks held 17% and credit unions 7%.
“We have not been the demise of the community banks,” Dykstra said. “It’s been the large banks that have led to the demise of community banks.
“We provide a member benefit of $10.8 billion to our member-owners,” Dykstra continued. “Never forget to tell your members that story. Talk about how much money is returned to members in better rates and fees…This is a time of celebration. We have done great things for members. But there are challenges ahead and I urge you to continue to be creative in finding ways to serve your members.”