We asked, you answered. Here’s what consumers are most concerned about with banks. Time
The $17.2 trillion banking industry is riding high in the current economy: Profits are up, new tax cuts are in, and the industry has more capital than ever before.
Two reasons: competition and reputation. Credit unions’ presence in the marketplace provides a check on higher banking costs and dishonest practices, and the banks don’t like that. Rather than do better, they’ve chosen to keep up their attacks on not-for-profit, member-owned credit unions.
The Iowa Bankers Association is in the throes of just such an attack right now, sowing misinformation about credit unions’ growth and their federal income tax exemption. Credit unions are growing because consumers like what credit unions provide. And credit unions’ federal tax exemption is generating economic growth.
Credit unions’ focus on affordable products and great member service, along with shady practices by some big banks, is why credit union membership nationwide has grown from 87 million to more than 110 million Americans over the past 10 years. And as long as banks continue to focus their resources on shareholder profits over customer service, that growth can be expected to continue.
Banks are still stinging from the Wells Fargo scandal, in which more than 2 million customer accounts were created fraudulently without their customers’ knowledge or approval.
Bankers could repair the industry’s bruised reputation by putting more emphasis on policing their own and keeping consumers’ interests in mind. But is that likely? Consider this:
- Who caused the financial crash? Not credit unions.
- Who hurt consumers in scandals that cost them millions? Not credit unions.
- Who emphasizes shareholder profits over service to consumers? Not credit unions.
If banks were really concerned about their communities and the people who live and work there, they would be less focused on trying to rid themselves of credit union competition and more focused on how to serve better.
Congress in recent weeks passed and the president signed a tax reform bill that generously increases the banking industry’s federal tax advantages. More shareholders are able to deduct their earnings as business income, the estate tax exemption has doubled, and banks have lower tax rates and more business-expense deductions.
For their part, credit unions, which cannot look to the market for capital as banks can, continue to pay employment taxes, property taxes, sales taxes and others. And their members – all their members – continue to pay income tax on the dividends they receive from their credit unions. The Iowa Bankers Association doesn’t want truly equitable competition, they want to put credit unions at a disadvantage, so they can continue their deceptive practices with greater freedom.
What’s important to remember is this: Consumers deserve to be able to obtain the financial products and services that best meet their needs, and they deserve to be able to enjoy the savings and safety that credit unions provide.
Competition is a healthy thing. It’s good for business, it’s good for consumers, and it’s good for economic growth.
Andy Fogle is the chief executive officer of Affinity Credit Union.
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Bankers want to eliminate credit unions, and you should be worried
The $17.2 trillion banking industry is riding high: Profits are up, new tax cuts are in, and the industry has more capital than ever before.
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