Florida Bankers CEO: Time to Eliminate Large Credit Union Tax Exemption

Congress should act to eliminate the “outdated and abusive tax loophole” for large credit unions, wrote Florida Bankers Association President and CEO Alex Sanchez in a Wall Street Journal op-ed (subscription required) yesterday. Citing research conducted by ABA, Sanchez noted that the number of credit unions with more than $1 billion in assets has ballooned from 13 in 1994 to more than 300 today. As a result, many of these institutions are able to invest heavily in advertising, including multimillion-dollar purchases of naming rights to stadiums, he added.

While Sanchez supported keeping the tax exemption for small credit unions that serve customers serving well-defined groups with a common bond, he advocated for an end to the exemption for credit unions with $500 million or more in assets, as well as “credit unions of any size that compete head-to-head with banks by offering commercial and business loans or services like wealth management.” He pointed out that Congress previously eliminated a tax exemption for mutual savings banks when it became apparent that they were actively competing with taxable financial institutions.