Credit Unions Looking For A Free Ride
By Frank Keating, CEO, American Bankers Association
In an era of crushing deficits, is it appropriate for an extremely profitable $1 trillion industry to freeload while all other businesses in the United States pay their fair share of federal taxes? Moreover, should Washington policy steer business away from institutions that pay a third of their income to support critical government services to institutions that pay nothing and enjoy those same services?
Most people don’t realize that credit unions get a free ride from the responsibility other businesses have to pay federal income taxes. Given the dire financial constraints and difficult fiscal choices that await our country, adding to the federal deficit by expanding the no-questions-asked tax exemption credit unions enjoy is simply irresponsible.
Yet that is precisely what credit unions are asking Congress to do. They are in town this week to ask that they be allowed to more than double their congressionally mandated limit on corporate lending.
That limit was put in place in 1998 in recognition that credit unions have limited business lending experience — and as a reminder that credit unions were chartered to serve individuals of modest means, not developers of luxury condos and shopping malls.