NAFCU responded to recent attacks launched by the American Bankers Association radio and print ads against credit unions with letters to congressional leaders.
"With the ever increasing regulatory burden on all financial institutions, we would hope that the banking trades and their members would be more focused on working with their counterparts in the financial services industry to achieve meaningful regulatory relief that will allow all financial institutions to better serve consumers," NAFCU President/CEO Dan Berger wrote in two separate letters sent to leaders in the House and Senate. (Click on the letter to expand.)
"Instead, the ABA has put resources into these attacks that could be better dedicated to regulatory relief efforts. The fact remains that if the nation's largest banks were more responsible to begin with, the financial crisis may not have reached such epic proportions, and the kind of regulatory burden the entire industry faces today may not be a reality," he added.
To support his argument, Berger pointed to fines and settlements paid by large banks in the aftermath of the financial crisis, including $55.7 billion for Bank of America and $23.8 billion for JPMorgan Chase.
"These numbers continue to increase and do not even reflect the fact that UBS, Ocwen Financial, Deutsche Bank, SunTrust, Goldman Sachs, Morgan Stanley, S&P and Credit Suisse all have also had over $1 billion each in fines and various settlements and buy-backs stemming from the financial crisis," he said.
Berger said NAFCU hopes the ABA ultimately changes its approach and focuses its resources on issues like regulatory relief and a national standard for retailers on data security, which could help the entire financial services community.
"The banks need our help to pass reg relief and they need to step back and step up," he told CU Times.
Berger reiterated that the cumulative benefit credit unions provide the economy totals more than $17 billion each year, according to an independent study released by NAFCU in 2014.
"As the study also shows, altering the tax status of credit unions would have a devastating impact not only on credit union members across the country, but also on consumers and small businesses in general. Eliminating the credit union tax exemption would result in the loss of 150,000 jobs a year, a shrinking of the GDP and a net loss of revenue to the federal government," he wrote in the letter.
Berger called the tax exemption an issue of survival for credit unions. While bankers continue to claim credit unions have unfair advantages, Berger questioned why banks are not lining up to convert to credit unions.
"What the bankers do not tell you is that nearly 1/3 of banks are Subchapter S corporations and pay no corporate income tax. Yes, they pay other taxes, but so do credit unions and their over 100 million member-owners who pay personal income taxes on the dividends they get from their credit union," Berger wrote. "Credit unions actually pay many taxes, such as property taxes, payroll taxes and state and local taxes."
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