To borrow from Mr. Becker's disingenuous BankThink piece ("
There is a new breed of credit union that hardly resembles the mom-and-pop variety that first inspired the industry's tax exemption. This new breed is not satisfied making small business loans. If they were, they would have no need to raise their member business lending cap, since credit unions today can make as many loans under $50,000 as they want. Rather, these aggressive, growth-oriented institutions want to go after the corporate loans that tax-paying community banks make today.
If Congress does the bidding of this small group (and it is small — only 29 credit unions are within one percent of the cap today), it could be the beginning of the end for community banks. One doesn't have to be an economist to know that a tax-subsidized industry will easily out-price one that pays roughly a third of its revenue in taxes.
It's also clear that if Congress sanctioned the exodus of loans from an industry that pays taxes to one that does not, the U.S. Treasury will be poorer. A similar, less generous bill in the last Congress was estimated to cost taxpayers $354 million in lost revenues over the next ten years. This one will cost even more.
As Congress tries to address the nation's intractable deficit, it would be unconscionable for them to add to it by giving more power to credit unions that have forgotten their mission to focus on individuals of modest means.
Frank Keating
President and CEO
American Bankers Association
