In a Nov. 29 guest column “Tax reform: A chance to get it right,” banker John Sorensen railed against tax exemptions for member-owned credit unions. His industry has been doing this for decades. They’ve historically stifled competition from savings and loan firms, consumer credit companies and credit unions.
He correctly states that in the 1930s, Congress made credit unions tax-exempt to encourage their mission of serving the financial needs of lower income people. He neglects to mention that this was necessary because banks usually would not lend to working-class folks.
As a former manager of the Allis Chalmers and Harnischfeger credit unions, I’m a staunch advocate of the credit union movement. Before that six-year involvement, I spent another six years in the consumer finance business. During that 12-year period, I experienced firsthand the tactics that banks will take to undercut their competition.
Here’s a 2010 quote from AARP Magazine concerning bankers. “ ... they’re less popular than politicians, according to a recent Zogby Interactive survey. And no wonder. After receiving a huge bailout to escape a debacle of their own making, America’s biggest banks raised their fees, posted record profits and paid enormous bonuses to their executives.”
Things have only worsened in the ensuing seven years. Consider recent scandals involving phony accounts, usurious interest, tax dodges, inflated late charges and ATM fees, illegal foreclosures, inadequate disclosures, victimization of active-duty military personnel, etc.
It’s hard to feel sorry about banks paying a higher tax rate than credit unions.