I'm responding to recent attacks against credit unions published on your editorial page. The latest was Monday, April 20, from A. Scott Anderson, president and CEO of Zions First National Bank. He uses the old political ploy of arguing against proposed legislation by saying that it will hurt taxpayers. However, he is really saying that consumers should pay more taxes, unless they deposit their money with a bank. Here is how it works:
He says, "Banks do want a level playing field." They want credit unions to pay taxes like banks. That argument sounds fair on the surface. But it's based on the false premise that a credit union is just a bank with a different sign hanging out front. In truth, credit unions are not banks.Banks are set up by investors using their capital to make a profit. However, credit unions are set up only to serve the consumers who save and borrow there. They have no investors collecting capital gains or watching their stock value rise. Any retained earnings of a credit union can only go back into their services. Credit unions have no profit to tax. Mr. Anderson said he didn't "believe anyone has yet calculated the annual cost of this. . . . " I will do it for you. Zero profit, times any tax rate, is zero tax.
So to get taxes out of a credit union, you have to take it away from the consumers with deposits or loans there. That would discourage consumers from using credit unions and force them back to banks. Then bank investors could get more money out of consumers. If bankers get their way, consumers are hurt and taxpayers get nothing.
So again we see that banks are not really looking out for taxpayers. They have used their political power to change bank regulation allowing them to increase their customer base with branch and interstate bank-ing. At the same time, banks have fought to restrict credit unions from even modest expansion. Despite what they say in their editorials, it is obvious that banks are fighting against consumers who want more choices for their financial services.
G. Kent Peterson
West Valley City