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PPI: Don't Make Credit Unions Die for Banks' Sins
Wednesday, September 18, 2013 7:00 AM

Five years ago this week, a collapsing housing bubble plunged America into its worst financial crisis since the depression, writes Jason Gold, director of the Progressive Policy Institute’s (PPI) “Rebuilding Middle Class Wealth Project” and senior fellow for financial services policy.

Wall Street’s near meltdown midwifed both the tea party and the Occupy movement, and triggered a bitter debate about the big banks that continues to this day. The ongoing controversy over whether we have solved or compounded the “too big to fail” program may have cost Larry Summers his shot at the Federal Reserve’s big chair, continues Gold. But amid all the focus on the handful of U.S. mega-banks, policymakers have paid scant attention to their little cousins – America’s credit unions.

Gold goes on to report that credit unions are drawing fire from the banking industry for their not-for-profit tax status. “Credit unions were never intended to be untaxed banks, yet that is what they have become,” Frank Keating, president and CEO of the American Bankers Association tells PPI.

Keating’s sentiment may be representative of many in the banking industry, but ultimately Gold says his words ring hollow.

“His association boasts a diverse membership of large and small banks,” writes Gold in his Sept. 17 op-ed. “Last time I checked, there aren’t any credit unions that maintain a profitable global derivatives business and an essential investment-banking unit that underwrites multi-billion dollar corporate mergers and acquisitions like some of his members.”

Eliminating the tax exemption, Gold continues, is a terrible idea that would deal a fatal blow to 6,815 credit unions that provide low-cost financial services to 93.8 million members nationwide.

To read more of the Gold op-ed piece, please click here.