San Diego County Credit Union has extended its title sponsorship of the Poinsettia Bowl through 2010, with options for 2011 and 2012. The $4.8 billion credit union has been the title sponsor of the game since its inception in 2005.
While no figure regarding the cost of being a title sponsor is released, the Poinsettia Bowl does disclose that the cost of being a premiere club sponsor begins at $25,000.
If San Diego County Credit Union can afford to buy the naming rights to a college bowl game, I believe it can also pay its fair share in income taxes. After all, the credit union reported a return on assets of 1.58 percent – more than 4 times the average return on assets of its peers.
And by the way, I don’t plan on watching the bowl game. There is not enough Prevacid in the world to handle the heartburn I would get whenever the title sponsor's name is mentioned during the ESPN broadcast of the bowl game.
So tell me Keith, do the following sponsorship deals give you heartburn too?
ReplyDeleteCapital One Bowl
Citi Field (Home of the New York Mets)
Bank of America Stadium (Carolina Panthers)
PNC Park (Pittsburgh Pirates)
Chase Field (Arizona Diamondbacks)
These banks not only have multi million dollar sponsorship deals, they also received tax payer funded TARP funds. Again, your hypocrisy goes on and on...
Just like the Visions FCU concert ridiculed in this blog, this is an ineffective argument for credit union taxation. The legal requirements for not-for-profit and non-profit status do not preclude the generation of surplus income. Extending the argument asserted above, only not-for-profits and non-profits operating with a loss would qualify for tax exemptions. Otherwise, you're left with some pretty big (brother) questions:
ReplyDelete* How much profit can a not-for-profit make before it becomes "unacceptable?"
* Who is to determine what a not-for-profit can/can't do with its budget/revenue/income?
The ABA should dwell on how/why credit unions qualify for their tax exemptions, not what credit unions actually do with their tax exempt status. (This feels similar to the attacks on TARP banks who "used taxpayer money for junkets, jets and golf tournaments.")
Personally, I think this sponsorship is silly. Even if the credit union finds the marketing approach effective, the name of the bowl game is simply ridiculous. Football fans ridicule this name/game more than any other. The San Diego County Credit Union Poinsettia Bowl has become the poster child for meaningless bowl games.
Like I said before... if the ABA thinks credit unions are making marketing mistakes with concerts and bowl game sponsorships, they should quietly step aside and let them shoot themselves in their feet.
This was asked of you in a prior post, but you apparently didn't feel inclined to respond, so I'll ask again: Would the ABA be supportive of taxing credit unions as a trade-off for credit unions having the same capital requirements as banks as well as a completely open field of membership?
ReplyDeleteYou asked "Would the ABA be supportive of taxing credit unions as a trade-off for credit unions having the same capital requirements as banks as well as a completely open field of membership?"
ReplyDeleteABA's current offical position is that a credit union, which wants an open field of membership and wants to have the same capital requirements as banks, should consider switching to a mutual bank charter. This achieves the same outcome.
I recognize that there are major regulatory obtacles associated with credit unions wishing to change charters. Also, there is considerable opposition from some within the credit union industry to the issue of charter choice.
Furthermore, I believe that there is a lot of dissention within the credit union industry about a quid pro quo of taxation for bank capital requirements and open fields of membership.
However, I'm willing to explore this proposal with credit union representatives and to share their opinions with ABA leadership.
I don't see the $25,000 as being much of an expense for brand marketing. Almost all financial institutions do some form of brand marketing.
ReplyDeleteThe cost is a cheap way to get the credit union's name into the homes of hundreds of thousands of potential members who live in San Diego County but decided to watch the game from the comfort of their homes. The cost per impression is probably down $0.25 or so when you consider that the credit union's name will probably mentioned a lot and their name will be in the middle of the playing field for all to see.
As a former credit union CEO of a middle sized credit union, I can remember spending $8,000 on a single loan promotion. Of course, the costs have probably gone up since then.
This promotion seems like a very financially prudent way to remember the credit union's potential members.
Dr. Leggett:
ReplyDeleteThere is no such thing as mutual bank charter that can be insured by the FDIC. We looked into that option here in California a number of years ago. Please get your facts straight.
By mutual bank, I meant mutual savings bank. I don't know the specifics about California law, but two California CUs did convert to a federal mutual savings bank charter.
ReplyDelete