Credit unions should pay taxes like the banks do
To the Editor:
The issue of whether credit unions, which don't pay state and federal taxes, should be able to expand their powers has surfaced again.
Credit unions are focused on expanding their powers to serve more wealthy customers, accept public deposits and engage in what could be excessive, riskier business lending. In essence, credit unions want all the powers of mutual community banks, but without having to pay taxes.
Credit unions claim that they are "not-for-profit, member-owned cooperatives that exist solely to serve the financial needs of members."
In fact, credit unions are extremely profitable. What business wouldn't be if you were able to keep 28 to 39 percent of your revenue that would normally go to taxes? That's the same money that should be going to the state and federal government to cover spending that we all rely on: Infrastructure, education, municipal services, mass transit, social service programs, etc. Between 2012 and 2014, the combined state and federal corporate tax exemption given to credit unions in Massachusetts cost taxpayers between $539 million and $751 million.
Everyone must ask: Do credit unions deserve to be given a competitive advantage by not paying state and local taxes?
All but a handful of banks in Massachusetts are community banks, and the vast majority of them (70 percent) are mutual banks. Mutuals are similar in structure to credit unions; but all mutual community banks pay taxes unlike credit unions. If credit unions want the same powers as mutual community banks, then pay taxes like we do.
Robert J. Fraser, North Adams The author is president and CEO of MountainOne Financial.