With all due respect to noted 70s rockers Bonnie & Delaney, I think it is fair to say that the theme song for the latest banker attacks on credit unions could be, "I've Got a Never Ending Lie For You." The hallmark of this latest round is the ever increasing volume of lies being spewed by the banking industry to push their point that credit unions need and should be taxed. As CUNA's vice president of economics and statistics stated recently, "There have been more half-truths and more outright lies from bankers over the past two years than ever before."
Strong words but, true words. Bankers have ratcheted up their campaign and are now hitting the Congressional offices in greater numbers than ever before to spread their campaign of misinformation and lies.
One Washington veteran remarked that more letters, more faxes, more e-mails and more visits are coming from bankers than credit unions, both on the taxation issue and the debate surrounding the Credit Union Regulatory Improvements Act (CURIA). It is clear that the bankers mean business.
Fortunately, we have the truth on our side...if we will use it. And, even though bankers have put on a full court press in Congress, so far no one has stepped forth to advocate their tax position, and a lot more congressmen and senators have stepped up to state their opposition. More and more lawmakers are also signing on to support CURIA, a truly meaningful bill for credit unions seeking regulatory relief.
But, the bankers keep coming with their never ending lies about credit unions. The bankers continue to state the myth that savings and loans and mutual savings banks lost their tax exemptions in 1951 because they became more "bank like." In a recent publication, the American Bankers Association quotes a Congressional Budget Office report stating that "Congress eliminated the [tax] exemptions for savings and loans and mutual savings banks on the grounds they were similar to profit-seeking corporations." The report quoted was written in 2003 seeking to summarize what happened in 1951.
An interesting quote, but simply the misinformed opinion of a congressional budget analyst seeking to explain why taxing credit unions might be an option. The real reason why savings and loans and mutual savings banks lost their tax exemptions can be found in the pages of the Congressional Record from 1951, not some staff report written 50 years later. In those pages, if the bankers care to read them, they will find actual debate from senators explaining that the exemption for savings and loans and mutual savings banks were being lifted because those institutions were not passing on the entire benefits to their customers. In other words, they were becoming similar to profit-seeking corporations since that was what they had become.
Another lie is the one that credit unions in places like Canada and Australia, which have been made subject to some form of taxation, indicates "that removing the tax exemption will not threaten the health and prosperity of credit unions." That will come as a surprise to the folks in Australia. An Australian newspaper, The Age, reports in its June 26, 2004, issue that only 180 credit unions remain in Australia with only 57 of them reporting a combined net profit last year. The remainder, according to the paper, "are trading in the red."
The taxation issue is not new to bankers. They have been spouting this line for decades. They produce fancy pamphlets and brochures that seek to shock their readers into believing that credit unions are pulling the wool over everybody's eyes and have so completely fooled Congress that the time has come to "reign in" these "mega institutions."
What is so very laughable about all this is that Congress' intent in 1998 when it passed the Credit Union Membership Access Act was to open up the barriers preventing credit union membership. In other words, credit unions are accomplishing, according to the bankers, exactly what Congress intended them to do in 1998. Why is this all such a surprise to them?
The answer, of course, is that bankers are still smarting from the licking they took in 1998 and do not intend to rest until they have destroyed the credit union movement. Our job now is to make sure our elected officials maintain the correct stance that credit union membership should be available to as wide a range of the population as possible. And, it is our job to remind Congress what great benefits credit unions bring to their communities and constituents.
The only difference between us and the bankers? We'll tell the truth. And, tell it often!!
Guy M. Hood is President and CEO of The Florida Credit Union League.
