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Wisconsin CU League News Release - 8/13/12


Credit unions' strong financial results represent consumer savings, not "subsidy"


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Pewaukee, WI -  “The broken record repeats,” said Brett A. Thompson, President & CEO of the Wisconsin Credit Union League. He was reacting to the latest tired refrain by the Wisconsin Bankers Association (WBA), which followed regulators’ assessment of Wisconsin credit unions’ mid-year financial position.  Credit unions are cooperative financial institutions that pay millions in taxes annually while saving members millions each year compared to what they would have to pay at banks.

“Every chance it gets, the WBA repeats misinformation in hopes that repetition will change the law and the facts. But their comments are no more accurate today than they were the last time, or the time before that, or the time before that,” Thompson said.


The WBA's intentional mischaracterization of credit unions’ net income as a tax “subsidy” and its misstatement of credit unions' mission as to serve only those of "modest means" are no accident. WBA continues to repeat them in hopes of obscuring the true facts:


  • Credit unions return earnings to depositors, not shareholders.   This occurs in the form of lower loan rates, higher savings rates and lower and fewer fees. In 2011, credit unions saved their 2.2 million members $203 million this way. Far from a “subsidy,” strong earnings position credit unions to benefit Wisconsin citizens—unlike banks, which return profits only to a small group of shareholders. In fact, credit unions save Wisconsin bank customers $66 million each year because of the competition that helps to keep bank fees and rates in line. Credit unions pay every tax banks pay—except corporate tax—because consumers, not shareholders, benefit from credit unions’ earnings.


  • All credit unions exist to benefit depositors. Under Wisconsin law, the mission of every credit union is 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.” Instead of limiting by income who credit unions can serve—as WBA suggests—state law requires credit unions to serve all members regardless of income. Credit unions’ growth is the result of all credit unions putting people before profits; it’s a consequence of consumers using a locally-owned, democratically controlled co-op to further their own financial interests instead of the narrow corporate interests of a few.


“Banks’ own role in the financial turmoil of recent years and relentless fee increases have led consumers to pay closer attention to who realizes the perks of their patronage and where profits go,” Thompson said. “Consumers have realized that they themselves benefit when earnings from their financial institutions are returned to them rather than going into the wallets of just a few. That's why the increase in net revenues of credit unions so far this year is nothing but good news for Wisconsinites.”

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