CORVALLIS, Ore. (3/14/13)--"Size has nothing to do with [credit unions'] tax exemption; it's all about structure," said Scott Burgess, CEO of Beaverton, Ore.-based Rivermark CU, in a debate aired on Oregon Public Broadcasting's "Think Out Loud."
The show featured Burgess and Lewis & Clark Bank Co-President/CEO Trey Maust discussing three bills in the Oregon legislature that would impose an excise tax on large credit unions as well as require Community Reinvestment Act-type disclosures from credit unions about their service to low-income residents.
"As credit unions, we're not-for-profit and member-owned financial cooperatives," Burgess said. "We're owned and governed by members and don't have stockholders. We return our earnings to members through lower rates for loans, higher rates for deposits and no or lower fees."
The tax exemption has nothing to do with the type of products and services offered or the size of the credit union, "but everything to do with the not-for-profit, financial cooperative structure-- and we earn that every day."
Taxation "would be devastating to Oregon credit unions and ultimately to credit unions in the rest of the U.S.," Burgess said, adding credit unions "have done a wonderful job" of showing value in the services provided members. "[Oregon] credit unions put $120 million back in the wallets of our 1.4 million members," he said. Credit unions offer a choice and competition. "Just being out there and competing with banks has put money in the consumers' wallets."
Protecting and defending credit unions' tax exempt status is the No. 1 legislative priority for the Credit Union National Association for 2013.
The debate also centered on the CRA-type of requirements in two of the bills that would require disclosures. "Giving back to our communities and serving low- to moderate-income members is in our DNA," Burgess said.
He cited statistics that showed loans growing 11% at credit unions since 2007, while banks cut loans 4.2%. In 2005, according to Home Mortgage Disclosure Act data he cited, 66% of mortgage loans at credit unions were to low- to moderate income consumers, compared with 56% at other financial institutions.
The data show "that credit unions have already done an outstanding job" of service, and that passing the two bills would be "overregulation. It addresses a problem that doesn't exist" at credit unions, Burgess added.
Maust noted that community bankers, which act very similar to credit unions, get lumped in with big banks unfairly. When asked if credit unions are the correct target for the banking industry, he said that the priority should be reducing the concentration of assets in large institutions.
The show's website received several dozen comments, with nearly 73% favoring credit unions, 12% favoring banks and the rest making anti-bank statements without addressing credit unions.
To listen to the full report, use the link.