Another shot’s been fired in the political war between banks and credit unions in Iowa. An Iowa State University study financed by the the Iowa Bankers Association finds some credit unions have grown so large and powerful they may no longer deserve their tax-exempt status and are not serving consumers’ needs as they should. Iowa Bankers Association president John Sorenson says the largest Iowa credit unions control the majority of credit union assets. Sorenson says the large, diversified credit unions offer the same products as banks to the same customers but they don’t have to “step up to the plate and support with their tax dollars the very communities that are supporting them.” Justin Hupfer, vice president of government affairs for the Iowa Credit Union League, says the study is “flawed” as it only compares credit unions with banks that are based in Iowa. Hupfer says “How can they leave out the national banks, which is 30-percent of the entire market? Their analysis doesn’t include U.S. Bank, Wells Fargo, Commercial Federal. So from our perspective, I really don’t know how we can comment on an analysis like that that leaves out such a substantial segment of the marketplace.” Sorenson contends that despite their origins, large credit unions have lost their unique ability to serve people of modest means. He’s again calling on state legislators to re-consider the tax breaks credit unions now receive. Sorenson says John Deere Community Credit Union is larger than 97-percent of the state-chartered banks in Iowa and questions whether the tax subsidy on credit unions is still warranted or needed. Countering, the Credit Union’s Hupfer says Sorenson’s association has long been on the war path, working to hurt the image credit unions. “This is nothing new,” Hupfer says, “The Iowa Bankers Association spends a lot of money in this state every year trying from a public relations and legislative perspective to disadvantage credit unions and our members which ultimately harms all Iowa consumers.” Hupfer says banks control more than 90-percent of Iowa’s market while credit unions have six-to-seven percent, adding, “certainly we’re not hurting banks’ business.” Bankers’ bids to get lawmakers to charge credit unions the same tax rates as banks has failed in the Legislature in each of the past three years.
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