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Banks attacking credit unions over taxes

Wednesday, Oct 3, 2012

* I’ve seen this billboard lately near the Metro East…

If you can’t read the sign, it says…

I didn’t know that credit unions don’t pay income taxes!

Did you?

Ask your legislator why

* And now there’s a radio ad running in the region. Have a listen…

* Script…

Man: I heard something really interesting today. A family of four, like ours, pays more income tax than all of the credit unions in the state combined.

Woman: That’s amazing! I didn’t realize that credit unions don’t pay taxes.

Man: It’s true. Get this. The tax subsidy for credit unions is more than $1.5 billion a year. And that’s just federal income taxes. They don’t pay state taxes, either. That subsidy could go a long way to solving the state’s budget problems.

Woman: Well I’m glad we do business with our local bank. Do you know that bank employees just spent the day at Chrissie’s school talking to all the kids about financial literacy? And they’re even going to sponsor Tom’s soccer team.

Man: Our bank sure does a lot in this community.

Woman: They sure do. In my opinion, if credit unions really want to do business in our community, like banks do, they’re going to have to step up to the plate and pay taxes like the rest of us.

Man: Your family should not pay more in taxes than the credit union down the street. Let your elected officials know that you say “No” to credit union tax exemption.

Brought to you by the Illinois Bankers Association.

Credit unions are not-for-profit companies, so they don’t pay income taxes. But pretty much anybody can join a credit union these days, and the banks have been complaining about unfair competition.

We haven’t had a real knock-down, drag-out fight between the bankers and the credit unions in a while. Expect to hear more about this issue next spring.

- Posted by Rich Miller        

  1. - Secret Square - Wednesday, Oct 3, 12 @ 9:46 am:

    Credit unions may not pay income taxes, but they also generally don’t make YOU, the customer, pay many of the crazy fees banks charge (such as a fee for letting your checking account balance get too low.) That’s why I switched to a credit union years ago and have never regretted it.

  2. - dave - Wednesday, Oct 3, 12 @ 9:47 am:

    I’ll tell you what… if Banks agree to not make any profits, then I can agree that they don’t have to pay taxes either.

    Banks - you agree?

  3. - collar observer - Wednesday, Oct 3, 12 @ 9:53 am:

    Since the banks seem to be talking about fairness, I wonder how much money does the credit union lobby have? Can we expect a real battle?

  4. - wordslinger - Wednesday, Oct 3, 12 @ 9:55 am: reports today that the nation’s six largest banks made $63 billion in profits in the previous four quarters ending in June, their best showing since 2006.

    I think the banks can just sit quietly for a while longer and count their record profits and lucky stars that the Justice Department chose not to prosecute any of their executives for driving the world economy into the ditch.

    Massive fraud and recklessness and all they do is pay cost-of-doing-business fines without admitting guilt.

    Did everyone get their taxpayer “thank you” card for TARP? Mine must have gotten lost in the mail.

  5. - OldSmoky2 - Wednesday, Oct 3, 12 @ 9:55 am:

    Yes, Dave, I too was just wondering what credit unions would pay taxes on if they don’t make profits. Could someone enlighten us as to just what unpaid taxes the bankers are talking about here? I’m sure credit unions pay payroll taxes, etc., but if there’s no profit, then how would they be taxed? Are bankers saying that anyone engaged in banking should be forced to make profits?

  6. - Old and In the Way - Wednesday, Oct 3, 12 @ 9:55 am:

    Not sure what is going on but we even had a letter to the editor in our local small town paper that was extremely critical of the local credit union. The letter was in the same vein as the ad above and I’m sure it was not authored by the local banker who signed it but rather the Illinois Bankers Association. I wonder how much income tax these “local” banks even pay since we don’t have any locally owned banks anymore. Probably very little. Next the corporate interests will be going after the phone and electric cooperatives too! They want it all, even the presidency……….

  7. - What planet is he from? - Wednesday, Oct 3, 12 @ 10:00 am:

    “. . . pay many of the crazy fees banks charge (such as a fee for letting your checking account balance get too low.)” Unfortunately my credit union does that too if you select a certain type of account. But at least they don’t charge a fee to see a teller unlike some banks.

  8. - Judgment Day - Wednesday, Oct 3, 12 @ 10:19 am:

    “But pretty much anybody can join a credit union these days, and the banks have been complaining about unfair competition.”

    Cry me a river. Sorry, but if it’s just the local banks, I pay attention to those folks. But if it includes the big players, it’s like “See Ya”. They can borrow money at the Fed Reserve window for like what, one-half of one percent.

    After what the ‘Banksters’ have done to the US economy and our housing market in particular, those people have zero, minus creditability. Not any.

  9. - Wumpus - Wednesday, Oct 3, 12 @ 10:25 am:

    Charge them, we are in a recession or something like it. The state needs money!

  10. - Third Reading - Wednesday, Oct 3, 12 @ 10:31 am:

    What? Huh? Hellooooooooo??

    The meanie-weenie little non-profit community credit unions are unfair competition for banks? Oh, puh-leeeeze.

    Banks? Like, the Big Banks we taxpayers bailed out for gazillions of dollars through the Troubled Asset Relief Program (TARP)?

    Banks? Like, the banks that strenuously resist the Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173)?

    (And lest we forget, we bailed out the savings and loans big time in the eighties. They never learn, do they? Or even care, it seems.)

    I suppose that the Illinois Bankers Association members really can’t be lumped in with the Bigs.

    And in mitigation, I’ll say this: there still are a fair number of smallish community banks here in Illinois. Including one in my home town. Nice work done by good people.

    But sharpening their elbows to take on credit unions? Guess they don’t want no stinkin’ competition.

    Memo to banks generally: cry me a river.

    Supplemental memo to Big Banks: stay the bleep off the public dole.

    I’m outta here.

  11. - 47th Ward - Wednesday, Oct 3, 12 @ 10:32 am:

    Banks have share holders who divvy up the profits. Credit unions, at least in theory, are owned by their members, who share the profits in the form of higher interest paid on deposits. That interest income is taxable.

    But yeah, once they opened up membership to anyone with a dollar to deposit, credit unions have painted a big bull’s eye on themselves. My credit union pays ridiculously low interest and I’m sure it’s staff is overpaid. I don’t mind seeing them get a little extra scrutiny, but the banks live in a glass house. It isn’t the smartest move for the bankers to pick a fight here.

  12. - Anyone Remember? - Wednesday, Oct 3, 12 @ 10:40 am:

    I thought businesses paid taxes on their profits. If there is no profit, there is nothing to tax. Exactly what is the banks think should be taxed?

  13. - VanillaMan - Wednesday, Oct 3, 12 @ 10:54 am:

    When the economic pie is not growing, those expecting bigger pieces start eyeing their competition to get more.

    This also applies to governments calling for “efficiencies” through centralization. Remember the faux problem posted here last month over Illinois having too many governments? Big broken bankrupt governments looking to snap up many smaller non-bankrupted governments for their revenues. “Efficiencies?” Bogus!

    Hungry big fish will eat smaller fish, even when everyone is cutting back.

    That is what this is.

  14. - Promoting the Difference - Wednesday, Oct 3, 12 @ 11:00 am:

    Credit unions are not-for-profit financial cooperatives. Earnings are returned to members in the form of lower loan rates, higher interest on deposits, and lower fees. Credit unions do pay taxes – payroll taxes, sales taxes, and property taxes. Board members serve voluntarily, and are unpaid. They do not make decisions to drive profit and line their pockets. At a credit union, every customer is both a member and an owner. They are invested in each member as members are each invested in the credit union. At a bank, however, a customer is not necessarily a stockholder and stockholders are not all customers.

  15. - Down_Downstater - Wednesday, Oct 3, 12 @ 11:13 am:

    Its very easy to make a bank or any other entity non-profit. Just give the CEO a salary that reduces the profit to zero.
    Now to expand on the tax issue. Scott Credit Union is moving its headquarters from Collinsville to Edwardsville and building in an enterprise zone. Not only does it get the special deal on income taxes, now it gets all the tax perks of an enterprise zone. Talk about corporate welfare at its finest.

  16. - 1776 - Wednesday, Oct 3, 12 @ 11:25 am:

    I love credit unions and community banks. The big banks and their lobbyist are brutal.

  17. - Liberty First - Wednesday, Oct 3, 12 @ 11:48 am:

    Banks are not going to call for credit unions to be taxed although why not? Credit unions have been lobbying congress to open up small business loan guarantees to credit unions which will cut into profits. I have found credit unions to be like most progressive policies, a good idea in theory but not much good in practice.

  18. - AC - Wednesday, Oct 3, 12 @ 12:13 pm:

    It reminds me of the efforts that the big telecommunications and entertainment providers are doing to shut down municipally owned and co-op cable and internet providers.

  19. - Just Observing - Wednesday, Oct 3, 12 @ 1:20 pm:

    I think the ads raise some valid questions. I don’t know enough about the issue to substantively weigh-in, but it may worth further study.

  20. - Common Cents - Wednesday, Oct 3, 12 @ 1:27 pm:

    Teenie-weenie credit unions? You mean like the $4.5 Billion asset CEFCU based in Peoria for example? 4.5 may be small potatoes (for now) compared to the mega-banks but if you are the President of a $50M community bank how are you supposed to compete with an organization that large that does not have to pay taxes? Not to mention the Community Reinvestment Act requirements that banks must comply with but that CUs are exempt from, despite their nonprofit mission. But CUs are “nonprofits” right, so they surely must be giving all of their earnings to “members”? Based on the CEFCU annual report, they made over $32 Million in net income profit - after all expenses (including staff) - last year, yet only paid out $7 million in “extraordinary” dividends. Where is the other $25 million going? All to member savings on loans or better rates on CDS? Doubtful based on the marginal interest rate savings the CU industry is touting (see CUNA report below – see page 6 - the interest rate differences are not huge except for auto loans, and in fact banks beat CU rates in some cases). So they are boosting their capital for something…and the only area they have left to conquer is commercial lending…could they be using lax regulatory standards to bypass the rules and boost the commercial operation? Who knows?

  21. - Really Unfair?? - Wednesday, Oct 3, 12 @ 1:36 pm:

    This is just the latest attempt by bankers to get more of the business than they already have. Credit Unions own such a small space of the deposits anyway. They are also not-for-profit and that is why they don’t pay income taxes. How difficult is that for bankers to understand? Here is the ultimate question—If credit unions have it so good why aren’t more banks converting to become a credit union? Oh yea there are no exorbitant salaries and stock dividends for Boards members and executives, now I remember.

  22. - Loop Lady - Wednesday, Oct 3, 12 @ 1:45 pm:

    Do the big banks wish to make their remaining competition (not really) extinct? Sure they do.

  23. - Linda Koch, President and CEO, Illinois Bankers Association - Wednesday, Oct 3, 12 @ 2:12 pm:

    Let’s be clear about what the issues really are here. Congress created credit unions in 1934 to serve “people of modest means” grouped in tightly-knit neighborhoods, occupational groups and other similar organizations. With this limited consumer purpose and small membership base in mind, Congress (and Illinois) exempted credit unions from income taxes and also gave them special regulatory treatment not provided to banks. Nobody is arguing that credit unions which have stayed within their original mandate should be treated any differently today.

    But when a particular credit union declares that it is vastly expanding its membership base or is aggressively growing its commercial lending business – like a number of credit unions are doing in Illinois today – they are straying far beyond the reasons for which they were granted special privileges by our government. In a time of exploding deficits and a phenomenally challenging regulatory environment for the lending industry – both in Illinois and throughout our country – why should those aggressive credit unions have their cake and eat it too? Why should they carry on tax-free and with far less oversight, while our local banks, together with virtually every other business (including mutual thrifts, mutual insurance companies and other similar business cooperatives), bear the burdens of financing our local roads, highways, law enforcement and other government services? As does every hard-working, tax-paying consumer, by the way.

    Our point is that the laws have become so liberalized over time that today many credit unions, particularly the larger ones, no longer meet their original mandate of serving a tightly-knit group of people of modest means. They provide the same diversified financial services as commercial banks and savings banks – including selling insurance, brokering securities, and making multi-million dollar business loans. And they are offering those financial services to a vast swath of unrelated customers in continuously expanding geographic areas — all while retaining their exemptions from income taxes and regulations like the ones that require financial institutions to reinvest in their communities. These are the credit unions we are talking about, and these are the ones which should be treated no differently than the financial institutions they are directly competing against today.

  24. - Cheryl44 - Wednesday, Oct 3, 12 @ 2:35 pm:

    This is one of those times when I catch myself thinking “But everyone knows credit unions are non-profit…” Then I realize, no, everyone does not know that.

  25. - walkinfool - Wednesday, Oct 3, 12 @ 2:43 pm:

    Bait fish attacking each other in the shark tank.

  26. - inquiring minds want to know... - Wednesday, Oct 3, 12 @ 2:47 pm:

    Seems to me the ad has a point.
    Credit unions have LOTS of $ to throw around to legislators (check out $ from their PAC - is it CUNA??)

    Credit unions joined in a fight at the end of last session to stick it to big banks.
    Not sure it makes sense because the credit unions already benefit from NO income taxes.

    Just wondering HOW much $ could be brought into the state if credit unions paid income taxes, just like other banking entities????

  27. - hisgirlfriday - Wednesday, Oct 3, 12 @ 2:49 pm:


    I appreciate you coming on this blog to clarify the Illinois Bankers Association position. I happen to think your position is pretty flawed but I appreciate your courage in stepping forward and responding to the debate your ad campaign has created.

    That said, the reason I find your campaign flawed is that for me as a financial services consumer, I do not think of the world of finance as credit unions vs. banks. But I do think of the world of finance as community banks/credit unions vs. the big banks.

    And I don’t like the big banks but I do like both credit unions AND my local community banks. This is making me choose between them and if you make me choose to side between credit unions and the local community banks, you will lose my business.

    Furthermore, if the Illinois Bankers Association is so upset about certain favored lenders not paying their fair share in taxes and getting special treatment that is so different from what the conception of financial institutions were in the 1930s, when can we expect a campaign by the Illinois Bankers Association against global banks that pay no federal taxes like Bank of America and Citigroup, which also get much better advantages from the Federal Reserve than the local community banks get? When can we expect an Illinois Bankers Association campaign supporting legislators to bring back Glass-Steagall?

    Because you see it is the big banks that have given you community banking institutions the bad reputation you have now and sent your customers to credit unions. Yet for some reason you are taking this out on the credit unions? Just a dumb move, in my opinion.

  28. - AC - Wednesday, Oct 3, 12 @ 3:29 pm:

    I can certainly understand why commercial banks don’t want to compete against not for profit credit unions. However, as a consumer, I benefit greatly from credit unions, because they, on average provide more competitive services than banks. Not everything in this country needs to be about profit, and the idea of a member owned institution is novel and useful. The Brits have Building Societies which serve a similar function, and similar to here it wasn’t the member owned institutions that were responsible for the global financial crash.

  29. - someofthepeopleallofthetime? - Wednesday, Oct 3, 12 @ 3:40 pm:

    I have accounts at a credit union, a local bank and a big bank (unfortunately none have much in them) for various reasons. They all charge fees of one kind or another and seem pretty much the same to me. The credit union doesn’t charge ATM fees when you use thousands of ATMs, but ditto for the big bank. They all charge overdraft fees. They all offer different kinds of checking accounts that do or don’t have monthly fees. They all offer online banking and credit cards. They all offer mortgages and car loans. They all charge you a lot of interest compared to what they pay you in interest. They all sue you if you don’t pay them back. They all have lobbyists in Springfield and Washington and have PACs. They all have executives who get paid more than I do. Credit unions are warm and fuzzy non-profits? They’re all banks, as far as I’m concerned.

  30. - Small Town Liberal - Wednesday, Oct 3, 12 @ 4:07 pm:

    Linda Koch - Wow, so a group wants to provide services your members provide, but without turning a profit? And you want to sell it to the public as a bad thing? Good luck with that.

    Just so we’re clear, were you rooting for Mr. Potter in “It’s a Wonderful Life”?

  31. - Rich Miller - Wednesday, Oct 3, 12 @ 4:15 pm:

    Take it easy. She had the guts to come in here under her real name. Show a little respect please.

  32. - Small Town Liberal - Wednesday, Oct 3, 12 @ 4:31 pm:

    Sorry, shouldn’t direct my ire for the banking industry at one person. Point taken.

  33. - cermak_rd - Wednesday, Oct 3, 12 @ 4:39 pm:

    I have an account at a local community bank and 2 different credit unions (both acquired from different jobs). The community bank has changed hands once and is now owned by a larger operator. The folks at my local branch know me, but the business has not attempted to form a relationship. The credit unions have better interest rates and a much better fee structure. They also tend to have better savings plans (such as contribute a fixed sum to a CD every month plans).

    I have a CD with one of the CUs and it offers a much better rate and easier automatic renewal. I also have a brokerage account through it and it too has fairly reasonable terms. Why is it so awful, if I wish to start a small business for me to get my start up funds from the credit union that has built a relationship with me?

  34. - Common Cents - Wednesday, Oct 3, 12 @ 4:40 pm:

    Hisgirl and AC - It is the community banks (not the big banks) that are hurting due to the unfair competition of rapidly-growing big credit unions. As you can see from a link provided in my earlier post, not all CU rates are better than bank rates - yet CU’s still get a tax break because they supposedly provide some pie-in-the-sky “consumer benefit”. So the CUs are allowed to lure away community bank customers with slightly lower rates for certain products, grow rapidly with little consumer protection oversight (CRA is an example), and yet they do not have to pay income taxes, nor do they have to prove what (if any) public benefit they are providing to earn that privilege? Remember, as I pointed out earlier (using the CU industry’s own numbers) CU rates aren’t even any lower for many comparable product lines – so where is the overall consumer benefit? You may individually have a lower “teaser” rate on an auto loan, but the CUs themselves are reporting that their rates are not all that great. As a side note, if we are having a national debate about corporate tax reform, which (maybe) will happen after the election, shouldn’t we take a closer look at all industries, including the CU industry which is now over $1 trillion in asset size?

    Cheryl – Credit unions are not charities. They are non-profits in the sense that they are business cooperatives, like other mutual companies (that pay taxes). Credit unions obviously are focused on growing market share and increasing profits. Otherwise why are they bothering to expand? CEFCU and Scott AFB are two examples of credit unions that are not focused on a public mission to help low income folks. Instead they are ramping up their business lending and competing head to head with local banks all over central Illinois.

  35. - Lovemycreditunion - Wednesday, Oct 3, 12 @ 4:49 pm:

    It is so sad that bankers feel it necessary to waste their customers money on yet another attack on credit unions. If they have that much excess money to toss around, why not just mail it to the state of Illinois. I noticed the IBA did not have the courage to put their name on billboards, at least Al Qaeda takes credit for their unnecessary attacks on the innocent. Did the banks dare to declare how many are Subchapter S banks are in Illinois and don’t pay either state or federal corporate income tax. It is so sad to see the banking industry result to underhanded tactics in an attempt to incite anger amongst the public. Credit Unions are not ashamed to “Walk Their Talk” with members, consumers, Legislators or whomever wants to hear our story. Credit Unions are an alternative cooperative financial industry that offers consumers a more cost effective way to do business and to the industries credit, do not attack banks. As Patrick Henry once said, “Don’t Tread on Me”. Maybe the banks should consider the wisdom of those words.

  36. - CU Member - Wednesday, Oct 3, 12 @ 5:26 pm:

    I’ve read all of these posts with great interest. It seems to me that Credit Unions operate under the purest of business models in that they share their success with all of their customers/members who are also their owners and Board Members that guide the credit union. Banks conversely seek to maximize their profits for the benefit of a few stock holders! Where would you rather do your business, with someone that is in it for your benefit as an owner/member, or someone that is in it for the benefit of themselves and their fellow stock holders? I think we all know what greed did to this country just a few short years ago. Seems to me the greed is alive and well.

  37. - hisgirlfriday - Wednesday, Oct 3, 12 @ 5:50 pm:

    Common Cents,

    I am well aware of the community banks suffering more than the big banks. That’s why I can’t figure out why you are not doing more to distinguish yourselves from the Bank of America/Chase/Citigroup crowd. I would think running an ad campaign bashing them and their giveaways and urging support of community banks would be a lot more likely to work than an ad campaign that’s based around making people resent something affiliated (even only in name) with Scott Air Force Base or a Peoria-area institution like CEFCU that has been around for 75 years. Personally when I think about credit unions I think of my alma mater, the University of Illinois, and its employees credit union whose membership is open to me as an alumnus. So an attack on credit unions? That gets associated with an attack on my university. It’s just an awful marketing strategy on your part.

    But now that the Illinois Banking Association is on this crusade about certain Illinois employers not paying their fair share in taxes and unfair competition, will you also be leading a fight to end the Illinois EDGE credit program? Will you be urging an edit to TIF districts? Hey wait a second, where was the Illinois Banking Association fighting against the tax breaks and special treatment for CME last spring?

  38. - Yellow Dog Democrat - Wednesday, Oct 3, 12 @ 6:51 pm:

    @Linda -

    I, like Rich, would like to applaud you for coming on Capitolfax to explain IBA’s views. More organizations should do that.

    You raise fair arguments about the tax exempt status of credit unions and whether they are consistent with original intent.

    What’s not clear is what solution you’re advocating? It sounds as if you’re advocating changes in federal law. In that case, why tell folks to “Ask their legislator?” Shouldn’t it be “Ask your Congressman?” Better yet, shouldn’t it be “Ask Congressman Shimkus?”

    As for the effort to link the tax-exempt status of credit unions to a solution to the state’s budget problems, that seems a bit far-fetched, although I’d love to see your numbers.

    If the feds are foregoing $1.5 billion in tax revenue, I’d guess the state taxes would be somewhere around $300 million. But that assumes two things: 1) revoking the tax-exempt status of every credit union, which you say you don’t want to do, and 2) that credit unions won’t change accounting practices to reduce their tax liability, which they surely will.

    So, maybe we’re talking about $75 million?

    Don’t get me wrong. I get the “level playing field” argument. Heck, I love the level playing field argument, and have used it successfully many times. Just not 100% sure it works when you’re America’s largest banks.

    Still, I’m glad that we’re having this discussion, and thank you for initiating it.

    And if I might be so bold as to make a suggestion, I’d strongly recommend direct mail over billboards.



  39. - Common Cents - Wednesday, Oct 3, 12 @ 8:03 pm:

    Cermak, you ask “Why is it so awful, if I wish to start a small business for me to get my start up funds from the credit union that has built a relationship with me?” How would you like it if the small business that you start up has to compete with the same kind of small business across the street, except that you have to pay taxes and the one across the street doesn’t? That’s the issue that community banks have to deal with all the time these days. And all of those benefits in receiving higher rates and paying lower rates that you’re getting from the credit union? That ‘s the direct result of the edge it has when competing with the community bank across the street, because it doesn’t have to pay taxes, and the bank does.

    Lovesmycreditunions – Very subtle, sir or madam. Those that stand on shaky ground resort to name-calling, I see. You should count yourself fortunate that Rich has not brought down the banishment hammer following your terrorist comment. I will address the one comment you made that is worth addressing – if you are familiar with Sub S banks, then you also know that the shareholders of these banks pay the corporate taxes owed, rather than the corporation itself paying. It is set up just like a partnership business. If Sub S is such a boon for banks, maybe credit unions should adopt a similar approach to taxation instead of the current method that allows credit unions to avoid taxes on earnings entirely - thereby maximizing unfair competition in the financial services marketplace. Sub S banks pay their fair share of taxes (on the bank’s earnings that flow through to the shareholders) and thus, help (like other tax-paying entities) in strengthening America’s communities. By contrast, the CU “dividends” to members - which may be subject to taxation - comprise just a small sliver of the CU industry’s profit. In my CEFCU example in an earlier post, the CU in question paid an “extraordinary” dividend payment of only $7 million (which would work out to $26 per member) on $32 million in profit. The rest, apparently, was tax-free retained earnings. Nice try!

    Hisgirl - I think there are many outlets engaging in big bank attacks, and yes, community bankers right now are being lumped in with the big banks. For the most part, though, this perception hurts the bank’s image (hopefully temporarily) but not the bank’s bottom line and ability to stay in business. Do you think the bankers are engaged in anti-credit union advertising just for kicks? It is obvious that community bankers are feeling the pain of mega-CUs moving in on their turf, and it’s harming their businesses. God willing, the attacks on “banks” will pass, but the mega-CU threat is not going away anytime soon – and it’s having a genuine impact on these small businesses. You make a good point regarding that some CUs have ties to well-liked entities, but shouldn’t that provide even more of a reason for the banks to be educating the public? As for your taxation comments, if the state wants to talk about tax reform, let them have that conversation – but the trillion-dollar CU industry should be included in that discussion.

  40. - amalia - Wednesday, Oct 3, 12 @ 9:53 pm:

    paid board members. check. staff paid much more than credit union staff. check. lower services at higher cost to consumers. check. I’ve checked and no thank you banks. credit unions are fantastic and their mission should be expanded.

  41. - Handyman428 - Thursday, Oct 4, 12 @ 9:01 am:

    I have read with interest the comments regarding the CU non-taxation issue. A re-occuring theme is prevalent in those posts who are either on the bubble or leaning toward credit unions. It is the theme that we like our “local bankers”, not the big banks. Well let me enlighten you, “local bankers, ie, community banks make up the largest group of institutions in Illinois. So lets get this straight, it IS the community banks that you like that are trying to get their point across by telling the public… they are the ones who are being threatened by the expansion of tax exempt credit unions. I don’t believe that anyone wants the credit unions to be banned from doing business, just level the playing field. If they want to offer the same products as banks and compete, then they need to be held to the same regulatory oversight as banks, and instead of being able to retain 35 to 40% of their earnings, pay taxes like EVERYONE else. I don’t like paying taxes either, but lets face it, it is a given. Fairness should rule.

  42. - Karen - Thursday, Oct 4, 12 @ 10:07 am:

    Aren’t there are a lot of Banks in Illinois that are S Corporations that don’t pay Illinois income tax?

  43. - bubbles - Thursday, Oct 4, 12 @ 10:37 am:

    credit unions can only build capital through retained earnings - they cannot sell stock like banks can. Their employees don’t enjoy the “stock ownership” perks that banks give, and their Directors can’t rich from “stock” ownership. Capital requirements are only increasing on all financial institutions (because of the problems caused by big banks during the financial crisis, not caused by credit unions). Are banks afraid they can’t compete with credit unions? Really? This seems like McDonalds wanting to eliminate the local hot dog stand. It’s not about paying your fair share.

  44. - Common Sense - Friday, Oct 5, 12 @ 1:27 pm:

    A common theme from the “pro” CU crowd on here is that the CUs don’t make a profit. Yet, CUs like Scott are expanding faster than a wild fire. The reason they “don’t make a profit” is because, at least in Scott’s case, they are investing members money in a vast expansion.

    If Scott has the resources to expand like crazy, just imagine how they could better serve their members (ie, better rates) if they lived within the original charter of the CUs.

    Where are the CUs getting the money to expand? That’s right, from its members. CU members are funding the expansion to the tune of higher rates on loans and lower rates on investments.

  45. - Small town community banker - Friday, Oct 5, 12 @ 1:37 pm:

    Regarding credit unions not making a profit I would refer you to page 3 of the 2011 Annual Financial Report of Scott Credit Union on page 3. Net Income for 2011 is reported as $7,455,147 compared to $6,747,200 for 2010. Look it up on their website.

  46. - Common Sense - Friday, Oct 5, 12 @ 2:33 pm:

    Nationally, CEO compensation at credit unions has risen 6.4 percent a year on average from 2006 through 2011, according to a survey from the Credit Union Executives Society. For institutions with $1 billion or more in assets, CEO salaries in 2011 averaged $486,117 at credit unions.

    Members pay this. The more members, the higher the salary. A lot like Amway.

    I don’t know of any CEO in a community bank that makes this kind of money.

  47. - Fed Up - Tuesday, Oct 16, 12 @ 12:38 pm:

    People are fed up with Banks, starting to go to CUs, now the banks are crying foul. They didn’t cry foul when they received taxpayer money bailouts.

    Banks, who going after next the Churches?

Sorry, comments for this post are now closed.

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