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Press Releases
Wisconsin CU League News Release - 05/12/11


Billions in bailouts not enough; banks now asking government to raise taxes on consumers

 


Additional resources


View PDF of release

View press release archive

2010 REAL Solutions Scorecard

For a Reason website

 

Media contact

 

Christine Henzig
Director of Communications
(800) 242-0833, Ext. 6019
chenzig@theleague.coop

 

 

Pewaukee, Wis. – The record is clear. Many banks behaved irresponsibly, playing a starring role in causing the collapse of our economy. Then they continued the abuse of American taxpayers by grabbing billions in bailout money when they themselves don’t pay taxes on their sizable profits. But incredibly, the Wisconsin Bankers Association (WBA) now is asking for more taxes on the working citizens of Wisconsin.

In a recent letter to Wisconsin’s Congressional delegation, WBA President/CEO Rose Oswald Poels asked for the tax increase on credit unions, institutions that have filled the void for loans to individuals and small businesses as banks have further restricted credit. 

But credit unions already pay millions of dollars a year in taxes; another tax on credit unions is simply another tax on working Wisconsin citizens because they own the credit unions where they borrow and save.

“The WBA’s outrageous tax increase plea is based on a hypocritical concern for taxpayers, their never-ending desire to legislate their competition out of business and fuzzy math,” said Wisconsin Credit Union League President & CEO Brett Thompson.

In a letter to the Congressional delegation setting the record straight, Thompson said the WBA’s letter is a “sloppy effort to distract the public’s attention from banks’ lead role in the economic downturn and their subsequent gratuitous reach for hard earned taxpayer money for their bailouts.” He also pointed out what he called banks’ hypocrisy, citing:

 

  • Many banks – more than 80 in Wisconsin – do not pay federal or state corporate income taxes each year. But whereas credit unions return their profits to members, these banks turn theirs over to the few shareholders that own them.

 

  • In the past, Wisconsin banks earning billions in profits paid nothing or next to nothing in state income taxes by hiding their profits in other states. 

 

  • Many banking industry executives have been handsomely rewarded via taxpayer bailout dollars, in spite of their poor performance.

 

“Last year, in Wisconsin alone, credit union members saved $203 million because of credit unions’ lower loan rates, higher savings rates and lower and fewer fees,” the League’s letter stated. “Although Ms. Poels cites a vastly inflated tax figure that might be collected from credit unions, even that exaggerated number is dwarfed—nearly six times over – by the savings of credit union members. And that doesn’t even include the $66 million that credit unions saved Wisconsin bank customers in 2010 because of the competition that helped to keep bank fees and rates in line. In the U.S. as a whole, the numbers are equally impressive: America’s credit unions last year saved their 91 million members over $6.7 billion when compared to banks.”

Thompson’s letter also pointed to a recent news report citing even more – as he put it – “egregious” hypocrisy.

“Associated Bank, headquartered in Green Bay, paid no state income tax from 2000 to 2009, in spite of booking $2.6 billion in profits over that period,” Thompson wrote.

“M&I Bank of Milwaukee paid less than 1% on its significant profits during those same years. And now, even after M&I has been sold to a foreign corporation, it will be permitted to use the bank’s big losses from the 2008 recession to offset profits well into the future. That amounts to a shift of several million dollars a year from Wisconsin’s tax coffers into the hands of investors in one of North America’s biggest banks. To add insult to very serious injury, M&I has started laying off more than 400 Wisconsin workers while sending profits – untaxed – out of the country,” Thompson added.

He also pointed out that in addition to the $269 million that credit unions saved for all Wisconsin consumers, credit unions have been doing all along what banks should be doing – but haven’t – to help consumers, particularly those suffering financial distress because of the economic downturn. And, they‘ve done it completely voluntarily, with no state or federal mandates, precisely because they are cooperatives that focus on the needs of their member-owners.

Thompson’s letter also noted that WBA never even considers other factors that play a role in setting tax policy, including how credit unions return value – beyond just dollars and cents – to their communities. His letter cited 100 credit union branches inside Wisconsin schools that have encouraged young people to save almost $3 million, credit unions’ small-dollar loans that provide an alternative to high cost payday loans, and the free financial counseling members receive to help them make ends meet and stay in their homes. He also pointed out that credit unions refinance troubled mortgages, alter loan terms to help members weather a job loss or health problem, rescue members from payday loan traps, offer programs to help members build or re-build creditworthiness and provide one-on-one assistance to help members develop a budget, save more, pay down debt and increase credit scores needed to qualify for more favorable loan rates. 

More examples of Wisconsin credit unions’ REAL Solutions can be found in print in the REAL Solutions 2010 Scorecard for Wisconsin Credit Unions at www.theleague.coop/scorecard and on video at www.theleague.coop/forareason.

 

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Credit unions are cooperative financial institutions that are owned by their members and do not have stockholders. Because they are not-for-profit, they return earnings to members in the form of more competitive rates of return on accounts, lower interest on loans, lower fees and improved services. Around 2.2 million Wisconsin residents belong to credit unions, of which nearly half are open to the local community. Find a credit union to join by visiting www.asmarterchoice.org.


©2005 Wisconsin Credit Union League. All rights reserved.
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