Bankers Are Drawing Blanks On CU Tax Bid
The headline in CUNA's weekly NewsWatch newsletter read, "CUNA to Congress: Bankers' Tax Attack is Trash."
The front page article went on to explain that the bankers were inundating Capitol Hill with postcards calling for repeal of the credit union tax exemption and CUNA was calling on loyal credit unionists, preferably volunteers, to write Congress to rebut the bankers' claims about credit unions.
The article goes on to urge individuals to tell Congress why the tax exemption is good public policy and detail the good things credit unions do in their districts.
Does that sound familiar? Was that in last week's "NewsWatch?"
No, that article was written in the April 8, 1996 issue (by me, by the way).
The point is the latest CUNA attacks on the bankers' attacks is a recurring issue. In fact, CUNA Chairman Dick Ensweiler told me recently of similar reports 35 years ago.
While the bankers' efforts have become more sophisticated and louder as credit unions have grown to take more of the market from banks, the effect has been the same. In fact, though the credit union tax issue has risen to the top of the agenda for the American Bankers Association, the bankers have yet to get a single one of the 435-member House or the 100-member Senate to publicly side with them on the issue.
That's right; not one! And they haven't even succeeded in getting the proposal on the table for consideration. That is, no bill has been introduced with repeal of the tax exemption in it.
It seems to me the focus on the bankers' attack is counterproductive for credit unions. It puts the lie to credit unions' assertions that the tax exemption is not a distinguishing characteristic of credit unions.
I believe credit unions would be much better served by bringing the attention of Congress to the many wonderful things they do, including serving people of modest means, but especially the return of millions of dollars in excess earnings (profits?) they have at the end of each year as special or bonus dividends to their member/owners.
That, to me, is the main distinguishing characteristic of cooperatives, particularly credit unions, and one of the main justifications for the tax exemption.
Now, that doesn't mean that the bankers won't keep trying. Or that legislation to repeal the tax exemption is not a possibility in the future. But the fact is repeal is nowhere on the radar screen of Congress.
But the constant suggestions by CUNA of the threat and webinars and letters and advertisements in Capitol Hill publications could backfire in one of two ways.
First, it may raise the profile of the issue among lawmakers who have never considered it. And some are bound to side with the bankers. There is some sign that the issue is already emerging into the public debate. It's not clear whether the bankers are responsible for that or CUNA, because the bankers attempts have failed, so far.
And second, the credit union faithful may just tire of being called to arms over and over and over again.
It reminds me of a childhood story my mother used to tell me. It was the popular story of the boy who cried wolf.
You remember it; the little boy cried wolf once, then twice, but the townspeople who came to rescue him found there was no wolf.
So when the wolf was really at the door and the little boy cried for help, the townspeople, already weary of the threat, failed to respond.
Let's hope that doesn't happen with credit unions.