WASHINGTON -- CUNA took the Government Accountability Officereport requested by Bernie Sanders (I-Vt.) one step further inseveral categories to reveal additional favorable figures forcredit unions in defending against bankers' attacks.

According to CUNA's analysis of the study, it would takeapproximately 313 years for the credit union tax-exemption of anestimated $1.4 billion a year, as figured by Treasury, to equal the$438 billion (2006 dollars) the federal government spent cleaningup after the failure of the Federal Savings and Loan InsuranceCorp. The total taxpayer cost boils down to $166 billion forresolution and $272 billion in total interest costs.

"Three centuries is a long time to wait to get paid," CUNAPresident/CEO Dan Mica quipped. "The GAO study shows just howabsurd is the banker argument that the credit union tax exemptionmust be erased to help pay government bills."

Based on the GAO study, CUNA Chief Economist Bill Hampel stated,"bank-specific tax breaks are between $1.3 and $1.9 billion peryear," conservatively figuring, over and above normal business taxbreaks. The GAO report only listed the deduction for excess baddebt reserves at $10 million as the sole bank-specific taxadvantage.

However, CUNA estimated banks usage of the $2.3 billion NewMarkets Tax Credit program, of which banks and other regulatedfinancial institutions make up "the majority." Then using theestimate of banks accounting for 25-50% of the volume of theselending activities, the value to the banks in tax breaks wouldequal $575 million to $1.15 billion.

CUNA also analyzed the GAO's findings that banks' use of theSubchapter S tax status allows them to pass income taxes through tothe shareholders providing a net savings of 22% on the bank andshareholders' taxes compared to Subchapter C banks, or 9.75% oftaxable income. At yearend, 2,356 banks were Sub S.

Based on these statistics provided by GAO, CUNA said that theSub S banks enjoy a tax break of $726 million. Between this, thebad debt loss provision, and the NMTC, CUNA said the bank-specifictax breaks come to $1.3 to $1.9 billion per year.

The GAO could not determine the amount of the $5.3 billion ofExport-Import Bank activity that commercial banks accounted for.The Ex-Im Bank is an independent U.S. agency supporting thefinancing of export activities with the goal of creating andmaintaining domestic jobs.

Additionally, CUNA pointed to the abusive tax shelters that havebeen employed by banks noted by GAO. Hampel wrote in his analysis,"Alarmingly, the GAO further reports that 'According to IRSofficials, they have found a number of instances in which somebanks have participated in tax shelters and transactions that theyview as abusive.' The GAO provides no estimate of the extent ofthese practices industry wide, but does report on one case in whicha court granted the government's motion for a summary judgment,upholding IRS's disallowance of over $9 million in deductions by alarge bank."

Sanders had also requested that GAO look at banks' profitgrowth. GAO found that the net income at banks and thrifts afterincome has grown more than twice as fast as credit unions: 7% atbanks, 8% at thrifts, and 3% at credit unions.

In terms of return on average assets, GAO reported that banks'ROA was 1.27%, while thrifts was 0.96% and credit unions were downat 0.81%. Non-interest income accounted for 43% of bank netoperating revenues, but just 34% of thrifts' and 31% of creditunions'. Hampel said this meant, "Banks are very, very profitable,with high and growing profits levels. This certainly puts the lieto the bankers' contention that the existence of credit unions isputting a damper on successful bank operations. If bankers are notcontent with the very strong profit performance of the past decade,one wonders if anything could satisfy them."

Hampel also contested the smaller banks' arguments that thelarge banks are the ones that are doing well, but the small onesare not. He cited FDIC data showing that a comparison of ROA overthe last five years puts large banks at 1.35%, smaller banks at1.22% and credit unions at 0.93%.

"Further, as banks have posted five straight years of recordprofits, the GAO study clearly indicates: The existence of creditunions has no impact on the ability of banks to make money--lotsand lots of it," Mica concluded.

The GAO report stated that publicly available information onbank executive compensation was limited, but upon consulting anumber of private sources, CUNA found that in 2006, the averagebank CEO total compensation was $353,000 compared to $88,000 forcredit union CEOs. CUNA said this disparity is apparent whencomparing like-sized institutions as well. At a $250 million creditunion, the average CEO compensation was $72,000, according to CUNA,while a similarly situated bank CEO made more than double that at$173,000. At institutions over $1 billion, the credit union CEO'saverage compensation was $389,000 compared to $737,000 for bankCEOs

CUNA plans wide dissemination of its analysis of the results ofthe Sanders GAO report, including regulatory agencies and CapitolHill. "It will be widely distributed on the Hill," CUNA Senior VicePresident of Legislative Affairs John Magill said of theiranalysis, including at Hike the Hills.

CUNA Senior Vice President of Political Affairs Richard Goseadded, "We're always happy to see the record straight."

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