Tuesday, May 17, 2011 11:49:00 AM
In another response to President and CEO of the New Jersey Bankers Association John McWeeney's attacks on credit unions in the local press, NJCUL President/CEO fired back again with a letter published in the Trenton Times on Tuesday, May 17th.
McWeeney's letter, titled "Credit Unions that Act Like Banks Should Pay Taxes", appeared in the Times on Friday, May 13th, and pushed banks' age-old argument that credit unions are overstepping their mission and, thus, should not be tax exempt.
Gentile's letter strongly defends credit unions' mission and their tax-exempt status. "Credit unions are indeed tax-exempt - and they earn that tax exemption every day," Gentile explains. "The tax exemption they receive is given back to the membership in the form of better rates and lower fees."
He goes on to explain the structural difference between banks and credit unions. "Credit unions are nonprofit financial cooperatives. All account holders at credit unions are member owners of the credit union. Credit unions do not exist to drive large profits for shareholders, as banks do. They exist solely for the lending and savings needs of their member owners. Credit unions have volunteer boards of directors who are elected from the membership. Simply put, credit unions have no outside influences over their business."
And banks are not exactly hurting. Banks continue to see record profits, Gentile points out, yet they cut back on lending. Credit unions might be tax-exempt, however "banks have time and time again cost taxpayers money through federal subsidies, the most recent being bank bailouts, including TARP money, and a $30 billion fund available for banks to tap into to lend to businesses," says Gentile.
McWeeney's letter can be found here.
Gentile's response can be found here.