THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, September 12, 1995 TAG: 9509120004
SECTION: FRONT PAGE: A10 EDITION: FINAL
TYPE: Letter
LENGTH: Short : 49 lines
Michael L. Hilling, director of public relations for the Virginia Credit Union League (letter, Aug. 30), took exception to my comment quoted in business writer Tom Shean's Aug. 13 article on credit unions, that credit unions have an unfair competitive advantage in the marketplace because they do not pay taxes.
To label my pointing out this fact as ``standard banker propaganda'' should be insulting to every taxpayer's intelligence. Would Mr. Hilling actually try to have readers believe that being exempt from the federal corporate tax rate of 33 percent, as well as being exempt from state taxation, does not significantly lower the cost of operation for a credit union.
Would he have readers believe that the cost of operation has nothing to do with the charge an institution imposes for its products and services?
Exempt me from paying taxes and I can do a lot of things I can't afford to do today. While I do not advocate it, I simply observe that banks could do a lot more too if they were exempt from taxation the way credit unions are.
Taxpaying banks already do more. Banks must comply with the Community Reinvestment Act, whereas tax-subsidized credit unions have no such obligation.
And who should be mad about this tax exemption? Just banks? No! All of us who pay taxes - individuals and business entities - should be mad. Why should our taxes be higher so that a credit union can be tax-exempt?
After all, credit unions are now selling the same products and services as banks and to the same customer base. To know that this is true one need only read the last sentence of Mr. Hilling's letter, where he urges all Virginian-Pilot readers to join a credit union. So much for the worn-out argument that credit unions serve only some narrow employer common bond. If you breathe air, you can shop at a credit union just as easily as at a bank.
Therefore, does it not strike one as strange that, at a time of budget cuts for welfare, health care, housing, education, etc., corporate welfare remains alive and well, with a $300 billion credit-union industry being exempt from taxes? This is an injustice that should be righted.
WALTER C. AYERS
Executive vice president
Virginia Bankers Association
Richmond, Aug. 31, 1995 by CNB