Wisconsin CU League News Release - 08/12/11
Banks urging government to heap taxes on consumers
Pewaukee, Wis. – “There they go again,”
said Brett A. Thompson, President & CEO of the Wisconsin Credit
Union League. He was reacting to suggestions being tossed out again by
the Wisconsin Bankers Association (WBA) that more taxes be wrung out of
the already tax-burdened Wisconsin citizens who own the credit unions
where they borrow and save. Credit unions are cooperative financial
institutions that pay millions in taxes annually while saving their
members over $200 million a year compared to what they would have to pay
at banks.
“Every couple of years, the WBA repeats the same false claims,
meaningless numbers and intentional and flagrant mischaracterization of
the law, apparently thinking that somehow that will make it true. But
it’s not true now, just like it wasn’t the last time. Or the
time before that,” Thompson said.
When the banks recently sent a letter to Congress asking for increased
taxes on Wisconsin consumers, The League exposed
their hypocritical plea for what it was - another attempt to stamp out
competition couched in feigned concern for the tax-burdened citizens
they claim to want to help.
Here are the real facts:
- The real savings for Wisconsin consumers. The
additional taxes that WBA exaggerates might be collected from Wisconsin
citizens who own credit unions is dwarfed - nearly six times over
- by the $203 million in savings that credit unions deliver to
members annually via lower loan rates, higher savings rates and lower
and fewer fees. And that doesn’t include the $66 million that
credit unions save Wisconsin bank customers because of the
competition that helps to keep bank fees and rates in line. If
that’s not enough, over 80 Wisconsin banks have a similar
exemption from corporate income tax that credit unions do. The
difference: the amount these banks would have to pay is twice that of
credit unions AND credit unions return earnings to their members while
banks return theirs to just a few shareholders.
- The real reason credit unions exist. No matter
how many times the bankers say otherwise, nothing in state or
federal law requires that credit unions serve primarily the
poor. Wisconsin law says a credit union exists to “encourage
thrift among its members, create a source of fair credit at a fair and
reasonable cost, and provide an opportunity for its members to improve
their economic and social conditions.” The law does not limit by
income who credit unions can serve. Indeed, it expects credit unions to
serve all members regardless of income. And credit unions are
taxed as they are for this same reason - because they are cooperatives
that return earnings to all their members, not just those few
shareholders - via more competitive pricing on financial services.
“In the recent past, banks took huge bailouts from taxpayers.
Until they were stopped, many held billions of dollars of assets in
other states to avoid paying their share of Wisconsin taxes.
According to a recent Capital Times report, 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.
“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.
“Tax Wisconsin consumers more? Enough already. It’s
time for the WBA to stop,” Thompson said. “As for consumers,
we invite them to move their accounts to a credit union - where they
will share in the profits and where they will truly belong.”
To find a credit union near you, go to www.asmarterchoice.org.
- END -
