PEWAUKEE, Wis. (8/8/11)--Despite huge taxpayer-funded bailouts during the past few years, Wisconsin banks are pushing to have credit unions pay more taxes, according to the Wisconsin Credit Union League. Many banks behaved irresponsibly, playing a role in causing the collapse of the economy, said the league in a press release. “Then they continued the abuse of American taxpayers by grabbing billions in bailout money when they themselves don’t pay taxes on their sizable profits, but incredibly, the Wisconsin Bankers Association (WBA) now is asking for more taxes on the working citizens of Wisconsin,” the league said. In a recent letter to Wisconsin’s congressional delegation, WBA asked for a tax increase on credit unions, institutions that have filled the void for loans to individuals and small businesses as banks have further restricted credit, the league said. The league noted credit unions already pay millions of dollars a year in taxes; and another tax would impact working Wisconsin citizens because they own the credit unions where they borrow and save. “The WBA’s outrageous tax increase plea is based on a hypocritical concern for taxpayers, its never-ending desire to legislate its competition out of business and fuzzy math,” said league President/CEO Brett Thompson. Thompson in a letter to the congressional delegation setting the record straight, said the WBA’s letter is a “sloppy effort to distract the public’s attention from banks’ lead role in the economic downturn and their subsequent gratuitous reach for hard-earned taxpayer money for their bailouts.” He also pointed out several statistics:
* More than 80 banks in Wisconsin do not pay federal or state corporate income taxes each year. But whereas credit unions return their profits to members, but these banks turn theirs over to a few shareholders. * In the past, Wisconsin banks earning billions in profits paid nothing or next to nothing in state income taxes by hiding their profits in other states. * Many banking executives have been handsomely rewarded via taxpayer bailout dollars, in spite of their poor performance.
“Last year, in Wisconsin alone, credit union members saved $203 million because of credit unions’ lower loan rates, higher savings rates and lower and fewer fees,” Thompsons’ letter stated, adding that WBA cites a “vastly inflated tax figure that might be collected from credit unions.” The banks’ number is dwarfed--nearly six times over--by the savings of credit union members, said the league. Credit unions also saved Wisconsin bank customers in 2010 because their competition helped to keep bank fees and rates in line,” Thompson continued. “America’s credit unions last year saved their 91 million members over $6.7 billion when compared to banks.” Thompson’s letter also pointed to a recent news report citing two prominent Wisconsin banks that paid little or no income taxes. In addition to the $269 million that credit unions saved for all Wisconsin consumers, credit unions have been doing all along what banks should be doing--but haven’t--to help consumers, particularly those suffering financial distress because of the economic downturn, Thompson said. He added credit unions have done so voluntarily precisely because they are cooperatives that focus on the needs of their member-owners. His letter cited 100 credit union branches inside Wisconsin schools that have encouraged young people to save almost $3 million, credit unions’ small-dollar loans that provide an alternative to high-cost payday loans, and their free financial counseling to help members.