What 1 Bank Group Never, Ever Mentions
In its latest barrage, the Wisconsin Bankers Association (WBA) is asking taxpayers to take a hard look at the "burden" credit unions' tax-exempt status puts on our state.
However, what the WBA fails to mention is that while they're busy suggesting lawmakers heap more taxes on consumer-owned credit unions, their mega-profitable member banks-earning more than $1.5 billion in profits last year alone-are looking for ways to reduce or eliminate their tax load.
That's why we at the Wisconsin Credit Union League have created the website www.theleague.coop/banksmuststop to share some facts following numerous public attacks by the bankers, including a flawed study about credit unions the WBA paid for and released in March.
Enough is enough. Every credit union in Wisconsin pays what it is required to pay by law in state and local taxes-millions each year-but the WBA keeps calling for credit unions to pay more to divert attention from bank attempts to pay even less.
While 180 Wisconsin banks settled with the state on taxes since it cracked down in 2003 on institutions holding income-earning assets out of state, at least a dozen banks have yet to settle and may sue to protect their use of Nevada subsidiaries solely as tax shelters. It's been widely reported in recent years that by using Nevada subsidiaries some of the state's largest, most profitable banks paid no state income taxes at all. The WBA would rather have the average working person-who uses credit unions to get more fairly priced services-pick up the slack so banks can pay less.
In Wisconsin, CU members would feel the impact of new taxes on credit unions in their wallets; they'd lose the $157 million in annual savings they receive because of member-favored pricing. Lower-income consumers alone would lose $44 million annually.
Laughably, the WBA even tries to come off as some type of moral guiding light, suggesting they're just looking out for the best interest of consumers when they argue that raising taxes on working people and at the same time lowering taxes on their super profitable member banks is the socially proper thing to do.
In the U.S., nearly a third of all banks-including 73 in Wisconsin-receive preferential Subchapter S tax treatment, and not all are small; Park Bank in Milwaukee, for example, which is almost the same size as the largest Wisconsin credit union, is a Sub S bank that has $802 million in assets. In all, 36 Wisconsin Sub S banks have more than $100 million in assets.
There's nothing wrong with banks using the tax code to their advantage. But should Wisconsin's working families pay the difference?
Brett Thompson is President & CEO of The Wisconsin Credit Union League.