The recent announcement that a credit union will pay more than $7.5 million a year for the naming rights to an NFL stadium raises the question of how a tax-exempt organization meant to serve people “of modest means” can afford such a hefty price tag, American Bankers Association President and CEO Rob Nichols writes in a new Washington Post letter to the editor.
The Washington Commanders recently awarded the naming rights to its stadium to the Virginia-based Northwest Federal Credit Union. Nichols noted that in the 1930s, Congress exempted credit unions from paying federal taxes in return for providing basic financial services to people of modest means linked through some common bond, such as an employer. Northwest was founded in 1947 to serve CIA employees.
“Yet, in pursuit of endless growth, many credit unions expanded their field of membership,” Nichols writes. “Northwest now offers membership through both multiple federal agencies and ‘hundreds of businesses and community organizations’ and offers to ‘help you find another path to membership’ for anyone otherwise ineligible.”
Northwest isn’t alone, he adds. Stadium naming rights and multimillion-dollar marketing campaigns are commonplace within the $2.3 trillion credit union industry.
“Absent regular congressional oversight, credit unions have expanded far beyond their statutory mission and nonprofit structure at the expense of their member-owners and American taxpayers,” Nichols writes. “The fact that a not-for-profit, tax-exempt credit union just spent more than $7.5 million to stick its name on our local NFL stadium should encourage lawmakers to continue asking tough questions.”
