"Of the 50 basis points in subsidy that the tax exemption provides, at least 33 basis points accrue to owners in the form of larger equity and larger assets. Approximately 6 basis points may accrue to credit union borrowers through lower interest rates, and not more than 11 basis points are absorbed by higher labor costs. There is little or no effect on deposit rates or other costs."
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Haven't seen this before.
ReplyDeleteIs there a link?
http://taxfoundation.org/article/competitive-advantage-study-federal-tax-exemption-credit-unions
ReplyDeleteI think this is a great article. It seems any other non-profit (though credit unions are supposed to be not-for-profit)have some level of accountability to the IRS by being required to complete a 990. On top of not sharing their tax exemption benefits with their members, they aren't even accountable to anyone for how they spend it.
ReplyDeleteDoesn't this mean that banks have nothing to worry about? The argument is that credit union's tax advantage allows them to price better.
ReplyDeleteWhat about the study "Banks and Credit Unions: Keeping the Playing Field Level" by Consumer Action that stated banks have between a 20 and 75 basis point tax advantage over credit unions? Even when the credit unions small tax advantages are considered?
ReplyDeleteLet us compare the federal corporate tax exemption of Subchapter S banks vs. that same exemption of credit unions.
Your premise seems to be supported by what the con-artists at Arizona Federal CU are doing. They are serving far fewer members from far fewer locations yet the huge growth in fee income and salaries are lining the pockets of employees, especially management. When you compare the fee income and salary growth to declines in membership numbers and total assets, it becomes apparent who is benefitting, or attempting to benefit from the money grab. If members woke up to what is happening, they would want to stop the looting of the credit union from the stewards who should be protecting the members.
ReplyDeletehttp://arizonafederalcreditunionmembers.wordpress.com/2013/04/08/arizona-federal-you-dont-shrink-your-way-to-greatness-click-on-folder-icon-in-lower-right-to-expand-file/