Banker Harris Simmons, chairman, president and CEO of Zions Bancorp, called for an end to the tax exemption for large credit unions on an American Banker podcast this week. Harris questioned the tax exemption that prevents institutions “who are effectively mutual savings banks from being taxed like mutual savings banks.” He added that “when they become full-fledged, really big community banks, they ought to be treated as such.”
Florida Bankers Association President and CEO Alex Sanchez also discussed credit unions during an interview with Fox Business today. Sanchez cited concerns about mission creep and an un-level playing field between taxpaying banks and tax-exempt credit unions. “Right now, our country, through our tax policy, is picking winners and losers by exempting one sector—credit unions—and not the other,” he said.
Sanchez highlighted several signs that credit unions are participating in activities that go beyond those originally intended by Congress. These activities include purchasing naming rights to sports stadiums and increasingly pursuing acquisitions of taxpaying banks, he said. He added that the industry is pushing for legislation that would eliminate the tax exemption for the largest credit unions. “We face a trillion-dollar budget shortfall this year. You cannot have Navy Federal at $110 billion [in assets]. . . pay no taxes at all.”