U.S. consumers believe federal credit unions should be held accountable for meeting the same legal standards as the banks they compete with for customers every day, according to a new survey conducted by Morning Consult on behalf of the American Bankers Association.
According to the survey, three times as many consumers believe credit unions should pay federal taxes just like banks compared to those who feel they should not (51% vs. 17%, respectively). Only 17% of Americans are aware that credit unions do not pay federal taxes, while 84% are unaware of credit unions’ tax-exempt status. Consumers also believe by a 5-to-1 margin that credit unions should have the same disclosure and taxation requirements as other tax-exempt organizations. Credit unions are not required to file the same tax disclosure form as other nonprofits, and they are exempt from paying unrelated business income tax.
“Today’s credit union industry has leveraged its preferential tax and regulatory treatment to grow rapidly and increasingly acquire tax-paying banks — something that clearly does not reflect Congress’ original intent,” ABA President and CEO Rob Nichols said. “These new survey results show that Americans overwhelmingly agree taxpayers and credit union members deserve increased transparency and accountability.”
Other survey findings:
- Fifty-four percent of respondents believe that credit unions should be subject to annual community reinvestment reporting requirements as banks are today, while just 14% oppose that requirement.
- Most respondents (76%) care if the business that handles their finances is held to the same legal standard for consumer protection as a bank and the vast majority (86%) agree that any business providing bank-like services to consumers should be held to the same standards for consumer protection as a bank.
- By a 6-to-1 margin, consumers said credit union acquisitions of banks should receive the same level of regulatory scrutiny as bank mergers (61% said they should vs 11% who said they shouldn’t).
ABA has also released a downloadable infographic of the survey results.
