Seizing on the news that Golden 1 Credit Union has purchased the naming rights to a new sports arena in Sacramento, California Bankers Association President and CEO Rodney Brown penned an op-ed — published Wednesday in the Sacramento Bee — challenging the credit union industry’s outdated tax exemption.
Brown noted that Golden 1 is the nation’s sixth largest credit union and reportedly purchased the naming rights for $120 million over the next 20 years. “Six million dollars annually for the right to have your name in bright lights on a sports arena is a sizable amount of money, but for a ‘nonprofit’ corporation that pays zero dollars in state or federal income tax, it’s probably not too much of a stretch,” he said.
Brown explained how credit unions have leveraged their tax exemption to grow aggressively and noted that the tax exemption is poorly targeted, often going to upper-income customers. He also highlighted the fact that California banks in 2013 paid $600 million in state taxes, and credit unions — if they were taxed — would have paid $111 million.
“There is no longer any valid reason why these large, banklike credit unions should retain their tax exemption, a message we will continue to promote while supporting our local, state and national economies,” Brown concluded.
