Readers tell me about credit unions

Since weighing inlast week with my opinion that bank-like credit unions ought to be assessed bank-like taxes, I have received many e-mails on the subject. My favorite is the following:

"Lee, you deserve a big THANK YOU for taking a stand on such a politically hot issue as this, and more importantly, for standing on the FAIR side of it . . . "

Most of the rest haven't been quite so agreeable.

One reader writes: "A credit union is a cooperative organization owned by its members. A bank is (usually) a corporation owned by its stockholders, who may or may not be customers of the bank. For that reason, everything a bank does is to maximize the return on investment to the stockholders; even if it means to hose the customers. By the same token, everything a credit union does is to maximize the return to its members (you). . . . When you root for the credit unions to lose this battle, you root for yourself to lose benefits . . . "

Another writes: "I haven't disagreed with you this much since you wrote for the sports page! You are the one who will be taxed in the end, not the credit unions. Compare interest rates between the banks and credit unions. Credit unions charge lower interest because they don't pay taxes. If they end up paying taxes, you will pay higher interest rates, it's that simple."

Another: "You must tell me why you felt the need to come out in support of the banks . . . No one in their right mind would say, 'I want to pay higher taxes.' . . . It all comes down to the structure of the two organizations. Banks have owners who want large returns on their investments. Credit unions enjoy common ownership and members pay taxes on their savings from doing business with their member-owned credit union. . . . You must have friends in the banking industry who you feel the need to help. It is the only explanation I can understand."

And finally: "Lee, you are wrong on this one. Credit unions gave me a loan when the banks would not. . . . The credit unions give back to the members, the banks are all about giving it back to the stockholders."

---

I appreciate all the attention and education.

I now understand even better the grand — albeit rather socialistic — notion behind credit unions, and long may they stand. (Especially the world's greatest credit union, the Deseret News Employees Credit Union, of which I have been a member in reasonably good standing since financing my first used car loan there in 1974.)

Communal, collective, not-for-profit credit unions are the friend of the little man. They are neighbor helping neighbor. They are like grandma loaning you the money. They are George Bailey of the Bailey Bros. Savings & Loan in the classic movie "It's a Wonderful Life," and the banks are Mr. Potter. Fine. Most of the credit unions stay that way.

But a few get big enough that they start behaving more like banks. They want to be Mr. Potter and continue to be taxed like they're still George Bailey.

One writer had the best idea — "I want banks and credit unions treated the same, too. So let's make the banks tax-exempt."

I think the e-mailer was being facetious. But when you stop and think about it, it's one of just two solutions that are equal and fair and make any sense. And the other one doesn't seem to be real popular with the proletariat.

---

Lee Benson's column runs Sunday, Monday, Wednesday and Friday. Please send e-mail to benson@desnews.com and faxes to 801-237-2527.