PORTLAND, Maine (8/13/12)--The Maine Credit Union League has published a letter to the editor of a statewide bi-weekly business publication to counter inaccuracies about credit unions in an article based on an interview with the chairman of a state banking association.
In a letter published Aug. 6 in Mainebiz, league President John Murphy responded to a July 23rd article, in which Christopher Emmons, CEO of Gorham Savings Bank and the new chairman of the Maine Bankers Association, "emphasized two points that I believe are inaccurate and deserve correction," said Murphy.
Emmons had said credit unions don't pay taxes. "This assertion is wrong," Murphy wrote. "Credit unions do pay taxes--payroll taxes, sales taxes and property taxes. Credit unions are exempt from federal taxation because they are not-for-profit financial cooperatives that exist to serve credit union members, not make a profit."
The second inaccuracy is that credit unions don't have the same kind of oversight as banks, he said. "Maine has 12 state-chartered credit unions that are regulated by the State Bureau of Financial Institutions, the same regulator that oversees all state-chartered financial institutions, including Mr. Emmons' bank," Murphy wrote in the letter.
"In addition, there are 50 credit unions that are federally chartered. All federally chartered credit unions are regulated by the National Credit Union Administration, a U.S. government agency that is responsible for examining and regulating credit unions, and enforcing many of the same federal laws in the same manner that the [Federal Deposit Insurance Corp.] regulates banks," Murphy added.
The letter also pointed out that that the Community Reinvestment Act was passed to reduce redlining credit practices by banks against low-income neighborhood, while credit unions "have no such requirement because, by their nature and mission, credit unions already meet the financial needs of a broad spectrum of people who fall within their fields of membership, and play an active role in community development and growth." Murphy noted research that finds "the performance of credit unions' lending to low- and moderate-income borrowers has been superior to other lenders."
The story also noted The $38 million in economic benefit to consumers credit unions provide through better rates and lower and fewer fees.
"We will not allow inaccurate statements and assertions by the banking community to go unchecked," Murphy said. "We have a responsibility to respond and correct those misstatements and, at the same time, reinforce the differences between credit unions and banks, by highlighting the strength and benefits that Maine's credit unions bring to the state's 620,000 members," Murphy said.
To read the entire letter, use the link.