Truth Speaks: Oregon Economists’ Analysis Debunks Bank Lobby Claims about Credit Union Tax Status

An economic analysis of bank and credit union data finds no evidence that state and federal tax policies give credit unions unfair competitive advantages over banks. Credit Unions vs. Banks: The Myth of the Uneven Playing Field is now available online.

ECONorthwest economists Dr. Randall Pozdena and Dr. Michael Wilkerson determined that credit unions’ tax structure has not positioned them to take market share from banks, that credit unions still serve a large share of consumers with modest means, and that credit unions do not unfairly benefit from not-for-profit tax status, all contrary to bank lobby claims.

The ECONorthwest analysis concludes:

  • Credit unions’ cooperative management model allows them to provide superior deposit and loan rates and greater protection from risk relative to investor-owned banks.
  • Trend analysis shows commercial banks continue to dominate the financial services market in deposit and asset shares; credit unions’ tax structure has not positioned them to harm banks’ market share.
  • Consolidation of smaller credit unions has been a response to the risk and operational inefficiencies of small scale and was not driven by tax policy.
  • Credit unions are continuing to serve Americans with modest savings, with the share of small accounts under $1,000 declining much more slowly than at commercial banks. Conversely, commercial banks’ share of accounts over $100,000 is 240% higher than credit unions’ share.
  • Credit union staff is paid less in salary and bonuses per employee than commercial banks, consistent with cooperatives’ focus on maximizing member benefits.
  • Credit unions’ cooperative financial services model is a consumer-friendly choice. As member-driven cooperatives, efficient decisions are made in the members’ best interests.

“The ECONorthwest study finally brings new, data-driven evidence to counter the bogus arguments the banking industry repeatedly asserts in an attempt to undermine credit unions,” said Troy Stang, president and CEO of the Northwest Credit Union Association (NWCUA). “I hope the Wall Street bank lobby will now focus more on improving their own services to consumers, rather than on trying to harm credit unions and their members.”

The NWCUA has   launched a website  for consumers,, which includes  animated videos, the economic report, credit union community impact reports,   and a direct connection to CUNA’s Don’t Tax my Credit Union site.

Posted in Compliance News, Compliance News, NWCUA.