Nussle: Credit union tax status supports investments in members, communities

Banker rhetoric on bank sales to credit unions continues to mislead consumers and lawmakers with out-of-context information, and America’s Credit Unions President/CEO Jim Nussle addressed recent banker attacks following the latest news of a planned sale.

“Once again, the bankers are peddling misinformation about the credit union industry and conveniently avoiding the facts,” Nussle said. “When banks choose to sell to credit unions, it's because it's the best option for people—their employees, their customers, and their communities. Credit unions keep branches open in places that may otherwise turn into banking deserts. They keep jobs. They keep affordable financial services available to families. Plus, 84% of these transactions involve low-income designated credit unions and every bank sale is subject to an average 25% tax of the purchase price.”

No bank sale takes place without the approval of its board, and bank sales to credit unions are no different in that regard.

"When banks buy banks—which has happened more than 2,400 times since 2012, compared to roughly 100 bank sales to credit unions—they often downsize and stop services,” Nussle pointed out. 

“And on the topic of tax, studies show that Subchapter S banks, which don't pay corporate taxes, don't pass their tax status savings onto consumers,” Nussle continued, responding to attacks on the credit union tax status. “But credit unions do use their tax status to reinvest in their members and communities. While the bankers are focused on their self-interests to protect their profits, credit unions are focused on people and securing policies that will strengthen our nation.”

Credit unions accounted for 0.6% of the share of bank assets sold since 2012, according to America’s Credit Unions data, and surveys show 89% of bank owners cite "retention of employees" as a key deciding factor to sell to a credit union.

Banks have closed a net of nearly 19,000 branches, while credit unions have opened a net of more than 500 since 2014, helping to “cure” financial deserts left behind when banks leave. 

America’s Credit Unions' resources and research is available to credit unions and industry partners with further data to combat banks’ misleading claims and highlight the credit union difference.