Nearly a month after Senate Finance Committee Chairman Orrin Hatch (R-Utah) wrote to the National Credit Union Administration questioning the federal tax exemption for the largest credit unions, one credit union CEO in an op-ed agreed that the time is now to explore taxation for those institutions.
In an op-ed in Credit Union Journal, Rob Taylor, president and CEO of Idaho State University Credit Union in Pocatello, Idaho, echoed Hatch’s concerns about large, multiple common bond credit unions that have been allowed to expand and, in many cases, compete with smaller credit unions. Often, these expansions are harmful to small credit unions “that have stayed true to their original fields of membership,” Taylor said.
He added that “the NCUA is contributing to this decline [in credit unions] with their laissez-faire approach to overlapping fields of membership.”
Taylor noted that most consumers already have access to a credit union given the broad availability of multiple common bond and community-chartered credit unions. Therefore, NCUA granting overlapping fields of membership should be rare and not a streamlined process.
“The problem with [the credit union] movement is most of us have been indoctrinated to believe our common enemy are bankers … when in fact the real threat to our future lies within our own industry,” he said. “I agree with Sen. Hatch that many larger credit unions operate in the same manner as taxable banks, and I believe it’s time for them to convert to bank charters and be taxed like the ‘big boys.’”
Read the op-ed.
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Kudos to CEO Rob Taylor. The credit union community has now matured into the final stages of Economic Cannibalism. The huge billion dollar credit unions are eating its young. Witness all the small credit unions being merged and liquidated into the huge credit unions. Generally, this incest within the credit union community includes filthy stinking rich payouts to the small credit union CEO & CFO. They call this salary continuance. The members call it extortion. The small credit unions net worth is exhausted to finance the the buy out. Is it the members net worth? Appears the net worth is now exclusive to the CEO & CFO. Follow the money. And the NCUA says nothing. NCUA approves of the net worth transfer. Members are not informed of the net worth transfer. Members have no vote on the net worth transfer of cash and benefits to the CEO & CFO. If the members new of this shake down they would not approve of the merger. Bank stockholders get better juice in merger/acquisition takeovers. Members own the credit union but get no direct financial benefit or gain. The membership is no better off. The CEO & CFO are financially much better off. Call it: GREED - When more is not enough.
ReplyDeleteRight On. Spot On. Where is NAFCU, CUNA or NCUA? Because NAFCU, CUNA and state trade association dues are funded in large part from the huge billion dollar credit unions they remain silent. It is not in there best interest to block the encroachment and expansion of these billon dollar credit unions into the turf of the small credit union. Pentagon FCU, Navy FCU, Mountain America FCU have branches in several states just like Chase Bank. The credit unions operate like Chase Bank. But these pseudo-credit unions hide behind the not-for-profit federal tax exempt charter while trolling as a bank. They operate like a bank. They should be taxed like a bank. NCUA would never impose they leave the federal credit union charter. Look at all the premium and operating fees the NCUA collects from Navy, Pentagon & Mountain America. Additionally, the NCUA would love to have fewer credit unions to examine and audit. Less work for the NCUA as they continue to collect greater income from Navy, Pentagon & Mountain America...to name a few. The NCUA stole this business model from the Mafia. Legal for the NCUA. Not so much for the Mafia. Call it legal shake down. Small credit unions can't compete against the huge giant credit unions - they are getting squeezed out. Fully endorsed and approved by the NCUA as the NCUA continues to fail to act on behalf of the credit union community.
ReplyDeleteWhere is CUNA and nafcu you ask?
ReplyDeleteIn our wallet.
Where is NCUA?
In our members’ wallet (why not pay the rebate now, eh mcwatters? Is it because we will have assessments from taxi loans?).
This ceo is 100% correct.
The large credit unions are tax free banks.