For more information, contact:
Eric Skrum, Wisconsin Bankers Association, 608/441-1216, eskrum@wisbank.com,
Twitter: @wisbank
Fees drive 96 percent income increase for state credit unions
(MADISON) – Wisconsin’s credit unions reported a 96 percent increase in combined net income in the first nine months of 2012 compared to the same period in 2011, according to data released by the Wisconsin Department of Financial Institutions (DFI). The rise in profits was, in large part, driven by fees paid by credit union borrowers. While net income grew, the amount of income tax paid by these subsidized institutions, $0, did not increase. The average citizen continues to pay more in income tax than any credit union, even those institutions which have over $1 billion in assets in Wisconsin.
Credit unions were granted their tax-exempt status to serve those of low and modest means; a mission they have continually strayed from as shown by their sharp rise to $164.7 million in net income. These profits resulted in $0 contributed in state and federal income taxes. Wisconsin lost over $13 million in critical tax revenue due to their tax subsidy. Those lost funds would have been reinvested in Wisconsin’s communities. Now, it is up to tax-paying citizens to support their communities while credit unions continue to make a profit at the expense of Wisconsinites.
“The current credit union tax exemption hurts Wisconsin’s economy. This income data clearly shows that communities are losing over $13 million in support because of this subsidy,” said Rose Oswald Poels, president/CEO of the Wisconsin Bankers Association. “While mission-oriented credit unions continue to serve those of modest means, several large, profit-driven credit unions have abandoned their congressionally mandated mission, leaving other businesses to fund important state services while these credit unions grow.”
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The Wisconsin Bankers Association is the state’s largest financial industry trade association, representing nearly 280 commercial banks and savings institutions, their nearly 2,300 branch offices and 28,000 employees.
