February 13, 2003
Don't know the difference? Well, me neither. Actually I know that CU's are non-profit, required by federal mandate to hold a 10%+ cash reserve (for CU's with over $500k in assets) , and are supposed to return the rest of profits to customers. I also know that I think my CU, America First rocks. I'm still a member of a large bank in Utah, but I basically just keep a few bucks in there for emergency, since they have many more branches than the CU. An interesting fact is that nearly 1/2 of Utahns (around 1.3 million) belong to a credit union.America First pays me interest on any amount in my checking account, as well as my savings account (I think as long as you have $25 in there), they have great interest rates, and they hardly charge any fees (cancelling a check is the only one I've ever paid I think, and it was for about 1/2 as much as what a bank charges).I bring this up because the powerful bank lobbyists are trying to push through State Bill 162 here in Utah which would cause large CU's to pay up to a 30% business tax, limit commercial lending, and disallow expansion in all but their home counties. I wrote my state representative explaining my opposition to the bill and he wrote back saying he had made some changes to the bill that made it more appealing. I'm still not buying it. Just because the banks are losing customers to the CU's doesn't mean they should be able to tax them to reduce competition. Rather, they need to alter their business model or something else in order to win back customers. 1/2 of utah can't be wrong.
Posted by charr at 9:15 AM
Reader Comments
I feel the need to play devil's advocate. What about the banks? Why should they get taxed and lose business because they have to pass that along to their customers?I got a letter from my credit union explaining their situation, but I have a feeling the banks would have their own explanation. Like most debates, neither one of them are anxious to give each sides a fair shake.I hesitate to place much credence in your argument that half of Utah can't be wrong. Have you seen how they drive? :)
Banks have a totally different business model than do credit unions and they are also very profitable. However, they are becoming less so as they lose customers. My argument for this is that the credit unions give much more to their customers -- the CU's win and the customers win. If this is working so well, then why not adapt this model. I think it is un-capitalistic to tax another business model if it is winning over your own. And yes...unfortunately I have seen them drive -- at 60 mph in the left lane. :(
If Credit Unions are required t o pay taxes, then banks should be required to set aside a percentage of profits that must be returned to their customers.Credit Unions are member owned - not Wall-Street owned. They are not-for-profit, meaning that they can earn profits but the only people who can benefit from them are the members/customers. When banks do the same, then they have the right to ask for taxation of CUs. Right now, the only people who really profit from the customers are investors.
Great comments guys. Peter FDA
Hi
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Happy Holidays
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I feel the need to play devil's advocate. What about the banks? Why should they get taxed and lose business because they have to pass that along to their customers?I got a letter from my credit union explaining their situation, but I have a feeling the banks would have their own explanation. Like most debates, neither one of them are anxious to give each sides a fair shake.I hesitate to place much credence in your argument that half of Utah can't be wrong. Have you seen how they drive? :)
Posted by dan at February 15, 2003 2:12 PM