Bianchini, Oklahoma Bankers Association President Exchange CU Tax Talk in Newspaper Article

OKLAHOMA CITY – Once again, the ongoing credit union/banker battle has made it into the media. This time it’s an article in the Aug. 3rd edition of The Journal Record, “Bankers open new front in battle with credit unions” which quotes both Oklahoma Bankers Association President Roger Beverage and Oklahoma Credit Union League President Bob Bianchini. The article by Ray Carter discusses the new round in bankers’ ongoing political battle with credit unions and their newly launched latest effort to lobby for ending CUs’ tax exemption. Carter’s article quotes Beverage as stating,”It’s really the same battle that we’ve had in the past with the credit unions only this time what we’re doing is focusing on what we term a `new breed of credit unions’ – credit unions that still hide behind that label but in fact are full-service financial institutions. And the campaign is designed to inform both consumers and lawmakers about the reality of today’s credit union competition with tax-paying banks.” Beverage alleges credit unions don’t “contribute a dime to homeland defense or national security or pay our teachers or our firefighters or our police, and that’s just not right.” Stressing that not all credit unions are being targeted by the bankers’ campaign, among the ones on the bankers’ radar screen because they’re examples of the so-called “new breed of credit unions” are Tinker FCU, WEOKIE CU and Tulsa Teachers CU, said Beverage. “If you just take the top 12 credit unions in Oklahoma that are more than $100 million in total assets – that’s bigger than 80 percent of the banks in this state,” Beverage stated, adding that in 2002 these credit unions “made over $57 million and didn’t pay a dime’s worth of federal income tax.” The objective of the campaign being conducted by the OBA, said the OBA president, “is to convince Congress to re-examine the tax-free status of credit unions,” and he acknowledges “that may prove to be a hard sell since members of Congress have resisted past efforts to tax credit unions.” Bianchini said banks should be “working at serving their customers rather than doing what they’re doing” by attacking credit unions. He reiterated that the main difference between credit unions and banks is their organizational structure, not the services they offer. As for Beverage’s comments concerning CUs’ moving away from their original mission to serve low-income people who live within a well defined area, Bianchini offered that, “I would suggest that banks don’t look like they looked 30 years ago either. Certainly getting into brokerage businesses and real estate and the types of things that they’re doing was something that I don’t know whether Congress intended that initially.” Bianchini further explained that any changes in the credit union industry are driven by market demand, and he suggested the bankers “are simply trying to reduce consumer choice.” “You wonder what their motivation is,” he said referring to the bankers’ efforts. “They have 90 percent of the market. Do they want it all?” Bianchini also pointed out that state-chartered credit unions do pay state taxes, although they’re exempt from paying federal taxes. In addition, he said, information on the Oklahoma League’s Web site shows there are 136 Oklahoma banks with Subchapter S status, which means they avoid paying federal income tax totaling $109 million. -