If acting more like banks, credit unions should pay taxes

I read with interest Murray William's guest column last week (“Credit unions are secure,” April 12.)

Back in the 1990s, I was running a bank in Sacramento, CA. My biggest competitor was the California State Employees' Credit Union, which purposely expanded its original charter — serving as a banking function for state employees — to include every warm body in California. They covered every town and hamlet, having hundreds of thousands of customers, many with little or no state employment affiliation.

Jim Leach was, at that time, chair of U.S. House Committee on Banking and Financial Services. Knowing Jim from my time at Merchants National Bank, I called and stated my case: Credit unions are great serving their stated constituents, but when they choose to expand to include all people as customers, they become banks. Acting as banks, they should pay taxes as banks. Jim agreed that my request sounded reasonable and fair.

After the committee had adjourned its session with nothing done as to the request, Jack, his financial guy, called me and explained: Jim couldn't let it out of committee as he was running for re-election and it might cost him the credit union vote in Eastern Iowa. I thought for a moment and finally said, "Jack, what you have just said is that Jim will not vote for “reasonable and fair,” but just for votes." There was no response.

Most credit unions are now really banks and should pay taxes.

Henry Royer

Past President, CEO and chairman, Merchants National Bank (now U.S. Bank)

Cedar Rapids