Fencing Match Staged in Congress
Tension between banks and credit unions pierced the usually staid atmosphere of congressional hearings last week as savings bank executive S. Russell Kingman took on credit union king Thomas J. Hughes.
Mr. Kingman, president and chief executive of Bridgewater Savings Bank, appeared before the House Ways and Means Committee to press for taxation of credit unions with more than $25 million in assets. Bridgewater Savings is a $95 million-asset mutual savings bank in Bridgewater, Mass.
Mr. Hughes, president of the Navy Federal Credit Union, said credit unions should keep their tax-free status because they are nonprofit, member-owned institutions providing an alternative to banks and thrifts. The Merrifield, Va.-based credit union has $4.5 billion in assets.
Mr. Kingman argued that credit unions offer many of the same products and services of banks and have grown so large that they should be taxed like banks.
Mr. Hughes disagreed and noted that he could deposit money in Bridgewater Savings while Mr. Kingman could not deposit money in Navy Federal.
Mr. Kingman said that he is a Navy veteran and asked Mr. Hughes if he would like to retract that membership statement. "Not exactly," Mr. Hughes said, no doubt wishing he had kept his argument more general.
"I tested this over the phone, and they indicated it was sufficient to become a member," Mr. Kingman told Mr. Hughes. "Maybe you better talk to some of your service representatives."
"Usually, witnesses don't go after each other," a committee staffer said.