DES MOINES, Iowa–Iowa’s bankers have launched a multi-media campaign that includes television ads calling for an end to the credit union tax exemption.
The campaign is being launched in conjunction with tax reform talks going on in the Iowa legislature.
The Iowa Bankers Association is behind the digital, radio and television ads targeting credit unions. One of the ads urges Iowans to help “end the credit union industry’s free ride.”
"We have a real opportunity here to address this issue and protect Iowa taxpayers," John Sorensen, president and CEO of the Iowa Bankers Association, told the Des Moines Register.
Iowa’s bankers have frequently complained of what they say is an unfair scenario in the state, as they pay a 5% franchise tax on profits. The bankers want credit unions, particularly the largest CUs, to be subject to the same tax.
"Every business in Iowa seems to survive just fine by paying some taxes to support education and healthcare and infrastructure in our state," Sorensen told the Register. "What makes them different?"
Justin Hupfer, vice president of government affairs for the Iowa Credit Union League, was quoted by the Des Moines Register as saying credit unions here already pay property taxes, sales taxes and payroll taxes, as well as a monies and credits tax of one half of 1% on legal reserves.
Hupfer was further quoted as saying Iowa's credit unions are gaining market share from banks, and banks are growing nervous, as customers increasingly consolidate among the largest financial institutions.
"Banks want to get rid of credit unions, is the short of it," he told the Register.
Hupfer said the Iowa league had expected the banks would gear up for a fight as the Legislature considers tax reform.
The Iowa Bankers Association reported that in 2016 the five largest CUs in the state made more than $100 million in combined profits. The ICUL responded that credit unions' not-for-profit status allowed them to save Iowa customers more than $100 million last year in lower fees and rates.
In a TV spot that can be viewed here, the voiceover says, “The average Iowa household earns $55,000 a year, and pays nearly $7,000 in income taxes. Meanwhile, just one Iowa credit union makes $57 million a year. This big credit union…pays nothing in income taxes. Absolutely nothing.” The video shows an Iowa family as they pay their income taxes. “Let’s end the credit union industry’s free ride,” the voiceover says.
