Christine Henzig, CUDE, Director of Communications, The Wisconsin Credit Union League, (262) 549-0200 main, www.theleague.coop
Pewaukee, Wis. – “It’s interesting to claim that taxpayers have profited from banks’ repayment of their TARP I bailout while at the same time ignoring that it’s the taxpayers themselves and not the banks who are repaying the debt,” said League President & CEO Brett Thompson.
That was his response to the Wisconsin Bankers Association’s (WBA’s) claim that taxpayers stand to profit as banks repay the bailout money they received following the collapse of the housing market. But WBA never disputes Wisconsin banks’ involvement in what has been reported as a national trend: more than half of the additional taxpayer funds that Congress has been distributing to banks nationwide since last fall to stimulate small business lending (TARP II) has actually been used to repay banks’ TARP I debt.
“While banks work to derail federal legislation that would allow credit unions to make more business loans available at no cost to taxpayers, they’re applauding themselves for using taxpayer funds to pay back taxpayer funds,” Thompson said.
The WBA also continues to mislead about the need to pass legislation that would raise the arbitrary federal cap on credit unions’ business lending. Wisconsin is among the top three states where demand for business loans has come closest to credit unions’ legal authority to fulfill the requests. Credit unions here that make business loans – in aggregate – already are very near the cap. If the cap is raised, in the first year alone credit unions could extend close to $13 billion in new credit, creating 140,000 jobs nationally. In Wisconsin, in just the first year, close to $400 million in new credit would lead to 4,000 new jobs.
“WBA continues to divert attention away from banks’ shenanigans, suggesting that instead of permitting credit unions to lend more, they should be taxed more,” Thompson said.
He noted that WBA continues to falsely claim that credit unions’ tax exemption is based on serving people of modest means when in fact their statutorily defined mission is to serve all of their members without regard to their means. WBA also ignores the significant financial benefits credit unions return to members, and the fact that credit unions’ tax status is based on the fact that members – not shareholders – receive those benefits. For example, the $34.5 million WBA cites as foregone state tax revenue from credit unions—a grossly exaggerated figure in itself—is dwarfed nearly six times over by the $203 million in annual savings Wisconsin consumers realize via credit union membership, and the $7.92 billion it cites as foregone federal tax revenue from credit unions over five years is dwarfed by the $6.7 billion in savings that consumers see nationally in just over a single year by using credit unions.
