Congressional Tax Reform may strap credit unions finally
Updated: Saturday, August 3 2013, 02:34 PM CDT
Big banks have been trying to strap their non-profit credit-union competitors with new taxes for years and they see the push for Congressional Tax Reform as the best chance to sneak such taxes in.
The credit union industry has grown significantly since the 2008 financial crisis getting a big boost from people outraged with the big banks. The very monopolies many blame for the crash of the American economy.
Now it seems those big banks are looking for a way to cripple the credit unions using Washington to crush the competition.
Consumers should hope the big banks don't succeed.
More of us have gone the credit union route.
Credit unions have nearly 96 million members adding more than two and a half million in the last year.
Carol Farrell/Banks At A Credit Union
"I think the fees are less at the credit unions, because you know there for a while they were saying that they were going to have additional fees on this and this. So we got out of the banks and went into a credit union."
Tax exemption is crucial to credit unions without them they would have to convert to banks which is exactly what the banks want.
A 2012 study found that removing the tax exemption would cost customers about ten billion dollars a year in higher fees and interest rates on loans... And lower interest rates on savings.
That loss of income could end up costing the federal government one and a half billion dollars in lost tax revenue annually.
And reducing competition in the financial services sector would hurt the consumer.
Carl Burger/Banks At Both
"Always better to have options. Always better to have options. I'm glad I have options. That's why I have like two different banks. And I don't think the credit union would have worked as well for me for my business. Where as the bank that I go to, they're very business friendly."
Navy Federal Credit Union is the nation's largest. NFCU increased its membership more than ten percent in in the last year growing to 4.3 million members.
Any changes to the credit union tax status could have huge impact here on the gulf coast.