To the Editor:
You'd think after receiving hundreds of billions of dollars in taxpayer bailout funds, bankers would be bit shy about slamming their credit union friends on the tax-exemption issue. As Sen. Bernie Sanders, I-Vt., has remarked, "Instead of questioning the tax-exempt status of credit unions, which have helped millions of members with lower fees, reduced interest rates, and better service, the American public would be much better served if Congress took a serious look at the escalating fees, economic concentration, and CEO compensation packages that big banks are receiving."
However, in "Could Rescue Open Door to CU Taxation Debate?" [Jan. 30], the bankers not only ignore this reality, but they resort to their usual tricks: Criticize credit unions for a modest, "self-funded" infusion of capital into the corporate credit union network while at the same time helping themselves to billions in Tarp funds.
ABA, let's just ignore the fact that two of the nation's biggest banks — Citigroup and Bank of America — have received $45 billion each from the federal government. ABA and ICBA, let's also ignore that 350 financial institutions have received Tarp funding from the federal government totaling $301.6 billion. Even community banks and Subchapter S banks have gotten into the act. Yet, despite the federal government bailout, banking lending to Main Street is down 0.08% for the third quarter of 2008. Where is all the money going? Why didn't the banks draw on the resources of their insurance fund? Why, in fact, did the capital markets walk away from them, necessitating a federal government bailout in the first place?
Compare the funding the banks have received to the $1 billion the National Credit Union Administration will be injecting into U.S. Central Federal Credit Union through the National Credit Union Insurance Fund, and the bankers' hypocrisy becomes abundantly clear.
Although credit unions received parity in the passage of the Emergency Economic Stabilization Act, credit unions have yet to receive one penny in its implementation. Yet credit unions have been impacted by the current crisis through "no fault of their own," as has been noted by House Financial Services Committee Chairman Barney Frank, D-Mass., and former Treasury Secretary Hank Paulson.
Credit unions are still trying to get parity on access to the Tarp funds while the bankers have already gorged themselves to multiple helpings. If that money had gone to Main Street, where credit unions would have put it, as opposed to funding capital acquisitions, CEOs' salaries, benefits and bonuses, and attempted purchases of $50 million private aircraft, we might see the merit of their actions. But here we sit still waiting to see any impact.
Let's not forget Congress granted credit unions an exemption from federal income tax because credit unions are significantly different from commercial banking institutions. Credit unions are about Main Street, not Wall Street, and provide a unique service as not-for-profit, member-driven financial institutions serving the needs of member/consumers.
Credit unions did not cause the current financial crisis we find ourselves in, yet we are certainly not immune to its fallout. But, we are doing our part to make loans to consumers and small-business owners. In fact, if the current cap on member business lending were lifted, we could do even more to help businesses grow. That would be a positive step and a win-win for the taxpayer.
So, when are the bankers going to start doing their part?Fred R. Becker
National Association of Federal Credit Unions