With the Arkansas legislature considering a bill that would allow state and municipal entities to deposit public funds in credit unions, a pair of op-eds today in the Arkansas Business publication made the case for ending state and federal tax subsidies for credit unions that pursue bank-like activities.
Lorrie Trogden, president and CEO of the Arkansas Bankers Association, pointed out that in 2017, Arkansas’ banks paid over $500 million in taxes, compared to zero for the state’s credit unions. “Allowing credit unions to take public deposits would only work against the state by reducing the state’s tax base as well as leaving less capital in community banks for lending to small businesses and consumers,” she wrote. “If credit unions want to stray from their mission and act like banks, they should be taxed like banks.”
Meanwhile, Larry Wilson, the CEO of First Arkansas Bank and Trust in Jacksonville, Ark., rebutted the argument that credit unions are truly nonprofit organizations. “They are, in fact, very much for-profit institutions,” he wrote. “They are simply non-taxed institutions. . . . How many businesses do you know that make more than $10 million per year and pay exactly zero in taxes?”
