Guerilla Interchange Ad Raises Specter Of CU Tax
WASHINGTON – An ad running in the Capitol Hill newspaper Roll Call is attacking credit unions in a manner reminiscent of an ad run years ago by credit unions’ main nemesis – the bankers – except this time bankers are on the same side, and in fact are partners with credit unions in the fight to block the interchange amendment to the bank bill.
The ad, which shows a duck smoking a cigar, states, “If it walks like a bank...talks like a bank...quacks like a bank...it should be taxed like a bank.”
But the guerilla ad doesn’t really disclose who it was sponsored by, other than a Washington lobby group called American Family Voices, which has helped organize lobbies for several progressive causes, such as health care reform.
It turns out the ad was financed by a group of lobbies already engaged in support for the interchange amendment that would benefit retailers, including the Merchants Payments Coalition and consumer lobbies U.S. Public Interest Group and Americans For Financial Reform, according to Michael Lux, the head of American Family Voices, who also runs a political consultant called Progressive Strategies.
Lux, who insists he had no idea the “quacks like a duck” tax attack was first launched by the American Bankers Association five years ago, said the merchants teamed with the consumer groups over the past two weeks to try to sway public opinion for the interchange amendment, which could result in the roll back of interchange fees on debit cards. “The credit unions are carrying water for the banks on the swipe fee issue, so if they’re going to carry water for the banks, maybe they ought to be taxed like banks,” Lux told Credit Union Journal yesterday. “Maybe not all credit unions, but certainly some of the large ones.”
Lux, who worked for two years in the Clinton White House as special assistant to the president for public liaison, said they have not decided whether to run additional ads targeting credit unions but they will continue to lobby for the interchange amendment. “This is just a shot across the bow,” he said.
The full ad reads: “In 1934, Congress gave not-for-profit credit unions tax exempt status due to their unique role as lenders of last resort for the poor and underserved.
But today, credit unions comprise a $680 billion industry. This is not your grandfather's credit union.
So why are these not-for-profit credit unions crying wolf about common sense interchange swipe fee reform?
Credit unions are carrying the water for credit card giants VISA and MasterCard — and the big Wall Street banks that helped cause the financial crisis.
It's about protecting profits.
Interchange fees cost small businesses and consumers $48 billion every year.
If credit unions want to play with the big boys — and share in their profits — then Congress should tax them like banks."