A credit union executive and an economist for a bank group squared off in a debate here.
John Franklin, president of the South Carolina league, debated Keith Leggett, chief economist for the American Bankers Association (ABA) during the South Carolina Credit Union Management Association meeting here.
In his remarks Leggett repeated the bank demand for a "level playing field" and claimed that recent moves by more banks to reorganize as Subchapter S corporations are a step in that direction.
Franklin countered that he has no problem with Subchapter S status for banks, but instead with the "hypocrisy" of the bank position that the tax burden should be transferred to credit unions.
Franklin opened in a retrospective of banks' role in America' development, recognizing that while industry requires credit, so, too, do the customers that keep industry alive and well. He also noted that the Independent Bankers Association of America (IBAA) has removed credit union tax exemption from its priorities, while the ABA lists the issue above terrorism-a fact Franklin said he finds disconcerting.
In his own opening, Leggett focused on the credit unions over $1 billion in assets, because "these are by and large legitimate competitors in all areas." He pointed out that there are other not-for-profit organizations that do pay taxes, such as food producers Ocean Spray and Land-O-Lakes, which have prospered. He further suggested that credit unions in several states like Indiana and Oklahoma where taxation has been in place have also survived.
The debate that followed delved into a comparison of credit union and bank assets, with Franklin noting that bank asset growth alone in recent years has equaled the total asset size of credit unions, and debate also centered on the inherent structure of credit unions versus banks, and credit unions' objectives to serve underserved markets and educate youth in financial fundamentals. Leggett found common ground on issues like bankruptcy and financial education. Franklin agreed, but noted how much of credit unions' time is consumed in defense of the tax exemption.
"I think there's so much we could accomplish if we worked together," Franklin said. "I just wish these attacks would end."
