Tuesday, June 25, 2013

Banks Complain Credit Unions Are Like Banks

Either these people are completely self-unaware, hypocrites or utter idiots.  Or all three.  But to send out a press release like this one from the Wisconsin Bankers Association:
Taxpayers Should Be Outraged as yet Another Billion $$ Credit Union is Announced
Merger creates state's eighth "mega-credit union"

(MADISON) - Taxpayers should be outraged that Wisconsin may soon have its eighth billion dollar credit union. Pioneer Credit Union and Capital Credit Union have agreed to merge, creating yet another mega-credit union that won't be paying any income tax to the state. That means the average taxpayer will pay more in income tax than these billion dollar institutions. This new credit union will also be larger than 98 percent of the tax-paying banks in the Wisconsin.

Income taxes are collected for a reason. With yet another billion dollar institution still not paying their fair share, this means it is Wisconsin's businesses and consumers which are left to shoulder the burden of supporting the state.

"There is no reason these large, profit-driven credit unions should be allowed to continue to avoid paying their fair share," said Rose Oswald Poels, president/CEO of the Wisconsin Bankers Association. "They clearly have abandoned their congressionally mandated mission to serve those of modest means in favor of seeking larger profits."
OK, so the banks, which nearly collapsed the world economy in their greed, got bailed out with our tax money and used that money to give the CEOs large bonuses who used that money to buy politicians like Scott Walker and Paul Ryan so that they could pass laws further benefiting the banks and CEOs are now carping because someone else is enjoying success.

It's amazing that their heads don't explode.

It's actually no surprise that the banks are squawking.  They're probably hurting a lot more than they are letting on.

Remember that two years ago, there was a lot of union folks that pulled their money out of them, including when the AFL-CIO pulled their money out of M&I (now known as BMO Harris) because of their support of Scott Walker and the other Teapublicans.  Many people - union and nonunion - had gone to the credit unions and haven't looked back.

And a lot of people pulled their money during the Occupy Wall Street and other actions.

Methinks that the banks might be hurting more than they are letting on.

I do know that we at Chez Capper have been receiving a marked uptick in advertising mailers from banks and the one bank we still have dealings with have started making so many phone solicitations to us so much as to be stalkerish.

At least they are starting to see that they aren't too big to fail after all.


  1. And let's not forget that credit unions are non-profit, thereby allowing better loan rates to it's members(notice how I didn't say customers?), along with other benefits with lower fees. I've been dealing with credit unions since I was 12, and have never felt the need to "bank" with a bank.

  2. Non profit my ass. All the bankers ask is for a level playing field. Let the credit union pay tax just like the bank.

  3. "Non profit my ass."
    Whether or not your ass is profitable is none of my business, but credit unions are in fact, not for profit entities. Congratulations on your ass though.

    "All the bankers ask is for a level playing field."

    Yes, those poor unfortunate bankers. It really is tragic how unfair our system is for them. I mean, it's not as if they've received tens of trillions in bailouts and near zero interest loans from the Fed or anything. It's not like they routinely discount federal law with no fear of any tangible reprisal from the agencies in charge of their oversight. I'm guessing they're hardly able to be profitable given the power of the massive cartel that is the credit union industry. If only banks had some kind of powerful lobbying industry working on their behalf, maybe then we could stop these crushing, unfair practices that banks are confronted with.

    "Let the credit union pay tax just like the bank."






    Yes credit unions, you should be paying taxes just like the banks have to. Please tell us when those banks are going to start. From what I can see, taxpayers are propping up banks.


    By all means, keep fluffing for banks though, just keep in mind one thing. Sooner or later they're going to blow their load, just remember to swallow when they do.

  4. They provide the same services and should be taxed the same. Today's credit union is not the mom and pop operation that existed in the 1930's. You provide the same service you should pay the same tax. As the WBA press release correctly points out, these new billion dollar Wisconsin credit unions are larger than 90% of the banks in the state. Fair is fair.

  5. "They provide the same services and should be taxed the same."

    I see,therefore I assume you also go on blogs arguing that Goodwill and St. Vincent De Paul should be taxed the same as Wal-Mart, as they both provide the same services. After all, how will Wal-Mart remain competitive if they can't sell their goods tax free and those non-profit merchants can? I mean, they offer the same services right? Therefore they must be structured identically with the same goals, and as a consequence, must be taxed the same right?

    "You provide the same service you should pay the same tax."

    Uh huh, yeah, makes total sense. We should absolutely ignore how an entity is structured when considering taxation. We should only look at whether or not there is an entity that provides the same services, regardless of their profit structure. With that in mind, time for Habitat for Humanity to start ponying up, after all KB and Ryland have to pay taxes. NPR and PBS, your free ride is over, NBC has to pay taxes. Feeding America, release the teat, McDonald's has to pay, so do you.

    " As the WBA press release correctly points out, these new billion dollar Wisconsin credit unions are larger than 90% of the banks in the state."

    Wow, sounds like this new credit union is going to be a real behemoth. How will those unfortunate banks compete? I mean, the newly merged credit union will have $1 billion in assets. How will banks like Chase($2.4 trillion in assets), Wells Fargo($1.4 trillion, and BMO Harris ($1 trillion)ever hope to compete with that kind of player? I know, I know, 90% of the banks are smaller according to the WBA. I wonder though, in what way are they smaller? Less assets? Fewer customers? Sure, if you add up all the local community banks maybe, but then you have to factor in all the small credit unions as well. You take the largest credit unions and use some community bank as a comparison forgetting that nearly half of all deposits in the US are held by the five largest banks. If small community banks are suffering, it's the mega banks that are the primary reason. Where's the WBA press release bitching that Wells Fargo, JP Morgan Chase, BofA, and Citigroup routinely pay no taxes, get government bailouts, interest free loans, and taxpayer subsidies? Why aren't you screeching about how unfair that is to small community banks?

    " Fair is fair"
    Sure is. Although to be truly fair, I guess banks will have to fire all their board members and directors, as the customers can now elect them from their own ranks. Oh, board membership will be voluntary, and unpaid. Additionally, banks will be informing their stockholders that regardless of how much stock they own, it's worthless. They'll have to open an account and make a deposit if they want to have a share in the bank now. Also, no more earnings paid to stockholders. Those earnings get paid to the account holders now in the form of reduced fees and higher interest. If there's reserve capital at the end of the year, the customers will all get an equal share in the form of dividend payouts, not stockholders. After all, fair is fair right? You can't have it both ways.

  6. Lots of red herrings tossed out. Do Goodwill and St. Vinnie's sell primarily new merchandise they buy from wholesalers or do they sell used goods donated by community members? When they start selling the same products as regular merchants then they should be taxed. They don't, so they aren't.

    The large credit unions long ago gave up their original mission of providing community-based lending and a limited service menu. Yes, the church- or small employer-based credit unions run out of the kitchen of one of the members should remain tax free, but the ones pretending to be banks should be subject to the same tax structure as the banks they compete with. Not such a hard concept to grasp!

  7. "Lots of red herrings tossed out. Do Goodwill and St. Vinnie's sell primarily new merchandise they buy from wholesalers or do they sell used goods donated by community members?"

    Does Play It Again Sports pay tax? I'm fairly certain the majority of their stock is used goods. Therefore, we must tax Goodwill stores according to your faultless logic. The examples aren't red herrings, it's the application of your desired tax criteria applied to another scenario to demonstrate how incredibly myopic your thought process would appear to be.

    No matter how much you would like people to believe otherwise, credit unions are structured differently than banks. It doesn't matter if they're large or small, they're not for profit. So, how then do you tax their profit, when any end of year reserves are paid out to members in dividends? Tax all the members personally? Credit unions already pay the other forms of taxes (property, sales, etc.).

    You conveniently continue to fail to address the fact that large banks, the ones you keep claiming those behemoth credit unions are actually competing with (and increasingly drawing customers from which is the real reason for the WBA press release), routinely do not pay taxes themselves. Additionally, they are propped up with tens of billions in taxpayer money. Stop pretending they're at an unfair disadvantage. They aren't. Credit unions are winning customers not because of a tax advantage, but because banks are driven by a relentless insatiable appetite for profit, with no regard or responsibility for the ramifications of their actions. Would be customers are beginning to figure this out, and are looking for alternatives.

    Your entire argument rests on the specious notion that banks are at some competitive disadvantage because of credit unions tax status. That's really quite comical and rather ironic considering that banks' competitive disadvantage comes because of their relentless pursuit of profit. Credit unions are able to provide better service and rates because they aren't profit seeking, not because they don't have to pay taxes on profit. Talk about an easy concept to grasp.

    I can honestly say that this has been a first for me. I've never actually had a discussion with someone who attempted to cast banks as the downtrodden, unfortunate victims of an unfair system. You honestly made me laugh. For that, thank you. Good luck in your endeavors.

  8. So let me ask you... You state that you want things to be fair. I agree. I am fine with Credit Unions losing their tax exempt status. If that happens, we need to truly level the playing field. Anonymous, would you also support dropping the inordinately high capital requirements that Credit Unions have to maintain (much higher than banks)? Would you allow the credit unions access to secondary capital for expansion? Would you allow credit unions to invest excess capital in riskier instruments (like banks can)? Would you remove any business lending cap so credit unions can loan as much as they want to businesses? Would you allow credit unions to operate any place that they wish and allow for unfettered expansion? The only tax that credit unions are exempt from is corporate income tax. Banks are able to shelter from paying this tax by taking out loans. Would you allow credit unions to now take out loans as a hedge against corporate income tax?

    Do you really want a level playing field? I certainly do.