Congress should act to eliminate the “outdated and abusive tax loophole” for large credit unions, wrote Florida Bankers Association President and CEO Alex Sanchez in a Wall Street Journal op-ed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.
