Credit unions push back against big-bank attacks

It’s no secret that credit unions are under attack from well-funded banks and their lobbyists. The nation’s for-profit banks – through their federal and state representatives – are trying to de-legitimize not-for-profit credit unions and have their tax-exempt status taken away, among other things.

One of those “other things” is taking place in the Commonwealth of Massachusetts. There, the Massachusetts Bankers Association is attacking credit union growth – specifically the increase in low-income designated credit unions. Citing an independent study, they claim that many of these credit unions are stretching the low income loophole and are receiving unfair advantages in the marketplace.

The banks argue that the benefits these credit unions give to the communities they serve are not great enough to warrant any special regulatory breaks.

But the credit unions claim that the banks are playing games. For one, they said the independent study was commissioned by bankers. Moreover, other studies show the value credit unions provide to their members in the Commonwealth is significant and reflects credit unions’ dedication to their communities.

For example, in 2015 Massachusetts credit unions delivered $328 million in direct financial benefits to the Commonwealth’s 2.6 million members in the form of better rates and lower fees compared to other financial providers.

For sure this is not a fair fight; bankers have more than 90% of the business in Massachusetts yet they are spending resources to attack credit unions. This is just one scenario playing out throughout the U.S.

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