Outdated Regulations

Modern credit unions have outgrown their preferential tax and regulatory treatment. Instead, they are focused on prioritizing affluent markets and commercial lending over their original mission of providing consumer-focused financial services to people of modest means. As these supposed nonprofits leverage their tax status to purchase banks and other credit unions, more than 400 credit unions now boast more than $1 billion in assets. 

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Expert Views

Karen Shaw Petrou, Federal Financial Analytics, Inc.
“Credit-union regulation is often premised on profit maximization, not mission compliance....”  
— Federal Financial Analytics, Inc, 2019
Rob Taylor, Idaho State University Credit Union
“I have colleagues from other small credit unions who share my frustrations. The problem with our movement is most of us have been indoctrinated to believe our common enemy are bankers when in fact the real threat to our future lies within our own industry. If taxation is in our future, then let it be with the large bank-like credit unions, so the entire movement doesn’t suffer from the actions of a few.” 
— Credit Union Journal, 2021
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Recent News and Insights


According to the Tax Foundation, one of the nation’s leading independent voices on tax policy, the federal income tax exemption for credit unions is inefficient, narrowly beneficial to one subset of the financial services industry, and an unfair competitive advantage that “…could be reformed, and the resulting revenue used to further improve the corporate tax base or pay for new spending.”


Large credit unions remind one of the classic video game Pac-Man, moving quickly and eating up as many banks as possible as their regulator remains as ethereal as the bad ghosts chasing dear old Pac. Unfortunately, the only people with a stack of quarters to keep the game going are American taxpayers as more and more banks leave the federal tax roll when they are subsumed by large, tax-exempt credit unions.


The University of Kentucky Federal Credit Union (UKFCU) and JMI Sports, UK’s multimedia rights partner, have announced a naming rights partnership with the university for the esports complex in The Cornerstone, a new multiuse facility now under construction at the corner of South Limestone and Winslow Street on campus.


Alaska USA Federal Credit Union (Anchorage, AK) and TCF National Bank, a subsidiary of TCF Financial Corporation (Wayzata, MN), announced on January 8 that Alaska USA has signed a definitive agreement to acquire TCF Bank’s seven branches located in the greater Phoenix, Arizona market, along with deposits and certain related assets.


A credit union that enjoys an exemption from federal taxes has bought the naming rights to a 5,000-seat theater in downtown Phoenix, continuing a trend among large credit unions to stray far away from the modest mission established for the industry by Congress years ago, in favor of aggressive market expansion.


Back in grandpa’s day, credit unions required a “common bond” for membership. That is, members who pooled their money to help those of “small means” needed to share a common employer, hometown, or go to the same church to enjoy special treatment from the government.

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