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Wisconsin CU League News Release - 05/12/11
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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.
- END -
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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