Fresh from a legislative victory opening the door for credit union-to-bank conversions, Wisconsin bankers stepped up their anti-CU offensive this week with a renewed call for lifting the tax exemption.
In a July 15 email sent to the state’s Congressional delegation and circulating across the state, the Wisconsin Bankers Association argued the federal government needs to look toward CUs for additional revenue in light of tough economic times.
In unusually combative language, the Wisconsin Credit Union League struck back with a broadside of its own accusing banks of continuing to “abuse U.S. taxpayers by grabbing billions in bailout money when these banks don’t pay taxes on their sizable profits.”
The league identified at least two large Wisconsin banks, Associated Bank of Green Bay “which paid no state income tax from 2000-2009 in spite of booking $2.6 million in profits” and M&I of Milwaukee which paid less than 1% on its significant profits during those same years.
Apart from now laying off 400 employees and being sold to a foreign bank, M&I is being allowed “to use the bank’s big losses from the 2008 recession to offset profits well into the future,” said the league in a response signed by Brett Thompson, president/CEO.
The letter to the Congressional delegation was sent by WBA’s new president/CEO, Rose Oswald Poels, citing $7.9 billion in available revenue if the tax exemption were lifted nationally.
“Now is not the time to doggedly protect sacred cows,” she wrote. “Rather now is the time to take a look at our tax system and identify areas in which exemptions are no longer necessary to support an industry quite capable of supporting itself.”
The WBA head two months ago led a Madison campaign to win passage of a loophole statute in a state budget that removes a series of structural barriers permitting CUs to convert directly to banks.
The league, calling the easing “radical” and harmful to CU members, maintained the new law wrongly bypasses the mutual structure and drastically streamlines the process on member voting while sharply reducing disclosure and communication rules.
Regarding the tax exemption fusillade from the bankers, Thompson charged that “many banks behaved irresponsibly, playing a starring role in causing the collapse of our economy.”
Moreover, “the WBA’s outrageous tax increase plea is based on a hypocritical concern for taxpayers, their never-ending desire to legislate their competition out of business and fuzzy math,” said Thompson.
Thompson said the WBA’s letter is a “sloppy effort to distract the public’s attention from banks’ lead role in the economic downturn and their subsequent gratuitous reach for hard-earned taxpayer money for their bailouts.”
He also pointed out what he called banks’ hypocrisy, noting that “many banking industry executives have been handsomely rewarded via taxpayer bailout dollars, in spite of their poor performance.”