NTU Panel: No Difference Between Banks, Credit Unions

There are no differences between banks and credit unions, speakers at a National Taxpayers Union forum agreed Wednesday.

“Credit unions are cultivating the same customers I am,” Laurie Stewart, president/CEO of Sound Community Bank in Seattle said. “The bulk of credit unions look like banks.” Sound Community Bank started as a credit union more than 50 years ago, Stewart said.

“If you’re going to act like a bank, be regulated like a bank,” Aaron Klein, senior fellow in economic studies at the Brookings Institution said.

The webinar was intended to be an examination of the tax exemption. The two 45-minute panels featured no credit union advocates and while the NTU said those watching the webinar would be able to ask questions, that did not occur. The NTU did not offer an explanation about the lack of a credit union perspective and did not respond to questions about it.

In addition to Stewart, one panel featured Robert Fisher, president/CEO of the Tioga State Bank in Spencer, N.Y. Fisher is the chairman of the Independent Community Bankers of America.

Panelists said that while credit unions are supposed to base membership on a common bond, that requirement has eroded. “If you want to join a [particular] credit union, you probably can find a way to do it,” Ryan Ellis, president of the Center for a Free Economy, a conservative group said.

During the webinar, speakers said since there are no differences between credit unions and banks, credit unions should pay corporate income taxes the same way banks do.

Ellis said that the tax issue could be addressed in several ways. “You don’t need to take a meat cleaver to the entire credit union industry,” Ellis said. For instance, Ellis and other speakers said that Congress could address the issue by taxing the largest credit unions.

And they said that federal credit unions should be required to file Internal Revenue Service returns that would provide details of their annual expenses, including executive compensation. “I would urge Congress to shine a light onto the entire industry,” Stewart said.

Klein also blasted the National Credit Union Administration’s regulation of the credit union industry. “The NCUA is more of a cheerleader,” he said. “Credit unions get just about everything they ask for from the NCUA.”

Speakers also said that new credit unions are being established, while there has been no growth in the number of community banks. However NCUA records show a decrease in credit unions, with 7,239 at the end of June 2011, then 5,164 a year ago and 5,029 now.

Fisher said he believes that members of Congress are increasingly interested in a closer examination of the credit union industry. “I think Congress is starting to hear the issue,” he said. “We are getting some traction.”

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