OLYMPIA, Wash. A new 22-page report authored by consultant Marvin Umholtz closely profiles Oregon CUs, comparing them to community banks and saying there is little difference, and in the process raises the issue of CU taxation.
Umholtz, president and CEO of Umholtz Strategic Planning & Consulting, told Credit Union Journal Quinn Thomas Public Affairs of Lake Oswego, Ore., commissioned the work. “But I knew full well it was underwritten by the Oregon Bankers Association. It’s all fact-based, and I think the facts speak for themselves,” said Umholtz. “The primary point is that credit unions are not the little guys some people present them to be or think of them as, and there are public policy implications from that. This raises the standard questions. This is not a new topic.”
Called “Oregon’s Credit Unions: Growing, Consolidating, and Often Indistinguishable from Commercial Banks,” the study argues that “large multi-branch, full-service Oregon credit unions have grown to be . . . indistinguishable from community banks . . . bank-like credit unions are a significant competitive force in the Oregon financial services marketplace.”
The report also said it is intended to assist “policymakers to consider whether bank-like credit unions continue to meet a public purpose deserving of marketplace-distorting tax and regulatory treatment.”
The Northwest CU Association called for member credit unions to join an audio conference on Wednesday to discuss the report. An e-mail from CEO Troy Stang to member CUs and obtained by Credit Union Journal said the association was aware of the study and that the report attempts “to attack Oregon credit unions” and “specifically targets credit unions’ tax status and executive compensation.”
The report contains a section on CU salaries, indicating that as credit unions have grown in size, so have executive compensation packages, which it argues is another argument for removing the CU tax exemption.
Lynn Heider, VP of public relations and communications for the Northwest CU Association, told Credit Union Journal, “We are well prepared to protect our tax and not-for-profit status. We are not surprised about this report. It’s the same old template the banks dust off every time the legislature is about to gavel into session, and Marvin Umholtz is a hired hand for bankers in this case. None of the points he raises are new and we are prepared, as are our credit unions, to defend our tax-exempt status.”