Pewaukee, Wis. – “There they go again,” said Brett A. Thompson, President & CEO of the Wisconsin Credit Union League. He was reacting to suggestions being tossed out again by the Wisconsin Bankers Association (WBA) that more taxes be wrung out of the already tax-burdened Wisconsin citizens who own the credit unions where they borrow and save. Credit unions are cooperative financial institutions that pay millions in taxes annually while saving their members over $200 million a year compared to what they would have to pay at banks.
“Every couple of years, the WBA repeats the same false claims, meaningless numbers and intentional and flagrant mischaracterization of the law, apparently thinking that somehow that will make it true. But it’s not true now, just like it wasn’t the last time. Or the time before that,” Thompson said.
When the banks recently sent a letter to Congress asking for increased taxes on Wisconsin consumers, The League exposed their hypocritical plea for what it was – another attempt to stamp out competition couched in feigned concern for the tax-burdened citizens they claim to want to help.
Here are the real facts:
* The real savings for Wisconsin consumers. The additional taxes that WBA exaggerates might be collected from Wisconsin citizens who own credit unions is dwarfed – nearly six times over – by the $203 million in savings that credit unions deliver to members annually via lower loan rates, higher savings rates and lower and fewer fees. And that doesn’t include the $66 million that credit unions save Wisconsin bank customers because of the competition that helps to keep bank fees and rates in line. If that’s not enough, over 80 Wisconsin banks have a similar exemption from corporate income tax that credit unions do. The difference: the amount these banks would have to pay is twice that of credit unions AND credit unions return earnings to their members while banks return theirs to just a few shareholders.
* The real reason credit unions exist. No matter how many times the bankers say otherwise, nothing in state or federal law requires that credit unions serve primarily the poor. Wisconsin law says a credit union exists to “encourage thrift among its members, create a source of fair credit at a fair and reasonable cost, and provide an opportunity for its members to improve their economic and social conditions.” The law does not limit by income who credit unions can serve. Indeed, it expects credit unions to serve all members regardless of income. And credit unions are taxed as they are for this same reason – because they are cooperatives that return earnings to all their members, not just those few shareholders – via more competitive pricing on financial services.
“In the recent past, banks took huge bailouts from taxpayers. Until they were stopped, many held billions of dollars of assets in other states to avoid paying their share of Wisconsin taxes. According to a recent Capital Times report, Associated Bank, headquartered in Green Bay, paid no state income tax from 2000 to 2009, in spite of booking $2.6 billion in profits over that period.
“M&I Bank of Milwaukee paid less than 1% on its significant profits during those same years. And now, even after M&I has been sold to a foreign corporation, it will be permitted to use the bank’s big losses from the 2008 recession to offset profits well into the future. That amounts to a shift of several million dollars a year from Wisconsin’s tax coffers into the hands of investors in one of North America’s biggest banks. To add insult to very serious injury, M&I has started laying off more than 400 Wisconsin workers while sending profits – untaxed – out of the country,” Thompson added.
“Tax Wisconsin consumers more? Enough already. It’s time for the WBA to stop,” Thompson said. “As for consumers, we invite them to move their accounts to a credit union – where they will share in the profits and where they will truly belong.”
To find a credit union near you, go to http://www.asmarterchoice.org.