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The for-profit banking industry is doing just fine even with the competitionBy Brett Thompson
WBA repeatedly and falsely claims that banks just cannot compete in Wisconsin. Some in the banking industry are so strident in their beliefs that their national association at one point placed taxing credit unions as a higher priority than fighting terrorism. The WBA position continues to be as outrageous as it is baseless. Here are the facts: • Banks don't just compete, they dominate in Wisconsin. They have a 90 percent market share and profits of $1.5 billion last year alone. Although smaller banks have seen a decline in their share of the market over the last five years, 90 percent of that loss has been to larger banks. Nationally, banks outperformed the other most profitable industries in the country, including the drug and oil industries. Credit unions serve those they were intended to serve, as evidenced by a non-biased study completed last November by the National Credit Union Administration, which found that credit unions continue to serve well the group they were formed to serve - working Americans. • Credit unions pay all taxes but one - the corporate income tax. This is the tax banks dodged through their use of Nevada subsidiaries until the recent crackdown by the state. • Credit unions provide $157 million in annual savings to Wisconsin consumers via lower loan rates, higher savings rates and lower and fewer fees. Wisconsin's lower income consumers save an estimated $44 million because they have access to credit unions and are not forced to use higher-cost banks. • Banks try hiding their own failings by pointing to credit unions with branches in high income areas. But credit unions do a better job than banks serving lower income households. For example, low income borrowers were almost twice as likely and minorities were two-thirds more likely in 2005 to have their home loan approved by a credit union. It's no surprise; credit unions operate 40 percent of all depository institution branches in the state's low-income census tracts. By contrast, 94 percent of all Wisconsin banks - including 12 of the largest 20 banks - have no branches in low income census tracts. Only about 50 of 2,300 bank branches exist in low income areas. • Banks mischaracterize credit unions, saying they are nothing more than community banks even though credit unions are owned by their member-depositors not stockholders; democratically operated; managed by volunteer boards; and credit union CEOs are paid on average less than one-fourth what bank CEOs are paid. The WBA would do well to abandon its never-ending boorish attacks on Wisconsin's working families and instead focus on helping banks do a better job of providing service in low income areas of the state. Brett Thompson is president and CEO of the Wisconsin Credit Union League. madison.com ©2009 Capital Newspapers. All rights reserved. |
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