Last week, I posted a press release from the League of Southeastern Credit Unions where they call on support for legislation (SB 918/HB 251) that would allow not-for-profit credit unions to collect public funds, just as for-profit banks already do.
Shortly thereafter, I came across an email from the Florida Bankers stating that if credit unions paid taxes, banks wouldn’t have an issue with them finally being allowed to be public depositories. I started digging after hearing this is a multi-year fight, and found that their main objection to this bill has been that since credit unions don’t pay taxes, they should not make money off of taxpayers like banks do.
When I first read both of these releases, I honestly did not care very much. I am not a local government, a school board or a public entity, so this does not impact me or seem like a barn burner for me. And while I do think credit unions should be allowed into this arena just for fairness sake, I did not get all fired up over it.
Then, in an unrelated issue last week, Florida bankers publicly cried foul when a bill was amended in the Senate that would end a tax break for foreign banks in Florida (that amounts to an estimated $11 million a year in corporate-tax exemptions) in order to provide funds for a new Miami Dolphin’s stadium subsidy. If the legislature were to kill the tax break, “banks can easily move,” an industry lobbyist told members, a decision which is entirely in their right to make.
However, this has me a little confused. Just a few days ago, banks claimed they should be the only ones eligible to be public depositories because they pay taxes that credit unions don’t. Yet within the same week, they are making headlines trying to protect one of several tax breaks amounting to millions of dollars that they benefit from. They can’t have it both ways.
If the only argument here comes down to taxes paid, then we can assume that any for-profit bank who pays the same taxes as a not-for-profit credit union should also be considered ineligible to be a public depository. Right?
Take Century Bank right here in Tampa, for example. This is just one of about 20-plus banks that operate as Sub-S corporations in Florida, that pay the same taxes as not-for-profit credit unions, yet they are currently allowed to serve as public depositories. No one seems to have a problem with that.
Again I ask, if the whole argument for why credit unions should not be allowed to serve as public depositories falls on the issue of taxes paid, then it’s a wonder how this argument hasn’t fallen on its face.
Watch the House Insurance & Banking committee meeting this week closely. In years past, this proposal has not made it out of its first stop in the House, and from the chatter surrounding the issue, it seems as though it may meet the same fate.
Be that as it may, the hypocrisy is worth a note and fairness should go both ways.