Periodically issues crop up that give an accurate, and usually depressing, indication of the extent to which our alleged democracy is or is not the captive of the elites. Here’s one that’s been flying under my radar, at least, and probably almost everyone else’s. It seems the banks have discovered that special tax breaks are a bad thing. No, I’m not talking about the fact that hedge fund billionaires get taxed at half the rate we peons pay; I am of course referring to the tax break that allows credit unions to provide an alternative place for the rest of us to plant our ever decreasing supply of money.
Given the steady growth of consumers turning to responsive credit unions for their banking, the oligopolistic banks that brought you the crash of the American economy – and made you lend them money to survive – are now trying to crush credit unions.
The vehicle being used by the large financial institutions – many of whom are still engaged in risky and unethical if not illegal actions – to remove credit unions as competition is to get their pawns in DC to pass legislation that will remove their tax exemption.
According to a July 6 LA Times article:
The tax exemption is crucial to credit unions, which by law can’t raise capital through public stock offerings the way that banks can, said Fred R. Becker Jr., president of the National Assn. of Federal Credit Unions, a trade group with about 3,800 federally chartered members.
“They’ll have to convert to banks, which is what the banks want,” he said. “Then they’d have, for lack of a better term, a monopoly.”
(via Buzzflash)
Sort of an acid test. There is no policy reason to do this, other than to hand the banks yet another bonanza. Even removing the tax break would mean a reduction in federal government tax receipts:
A 2012 economic study commissioned by the trade group found that removing the tax exemption would cost consumers about $10 billion a year through higher fees and interest rates on loans, as well as lower interest rates on savings.
That loss of income would end up costing the federal government $1.5 billion a year in lost tax revenue, the study said.
It’d be interesting to keep an eye on this and see who steps forward to crush the credit unions at the banks’ behest. Why does the name Chuck Schumer pop to mind?
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