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A Level Playing Field: Banks vs. Credit Unions

How would you feel if we were going to race in 100 yard dash (the length of a football field) and I told that I was going to get to start at the 21 yard line while you had to start at the goal line?

Or what if I we were going to do 100 pushups?  Except for yep, you guessed it...I'll be starting on 21  while you start at 0.

Or what if I our boss offered to pay both of us $100 for doing the exact same job.  But then he took $21 from you for taxes while I kept my entire $100.

Would that seem fair?  Who do you think would win the race or pushup contest?  Who would have more money even though we both did the same job?  

It seems odd to me that in this world of 'equality for all' that businesses offering services in the same field would be treated unfairly.  Now I understand competitive advantage, market share, niche business and all of that.  But for Congress to outright give one type of business which competes directly against others a 21% advantage just seem a bit unfair to me.  But that is what happens when credit unions and community banks are in the same small towns.  Maybe you know this, maybe you don't, but credit unions do NOT pay federal income taxes (current rate of 21%).  Yes, they are exempt from paying taxes and funding the federal government which actually means that more of that load falls back on each and every citizen who does pay federal income taxes since these businesses don't.

What does this mean?  Well, for one, it means that for every $100,000 that a credit union earns in profit, a bank has to make an additional $21,000 to break even with them after taxes.  It means that yes, credit unions can sometimes offer higher rates on deposits and lower rates on loans.  If you could open a restaurant and name it something special like Burgers To Go Credit Union and get a 21% reduction in food costs, wouldn't you?  

Let me be clear, I don't blame credit unions, their employees, or their members/customers.  I blame Congress for allowing a company to directly compete against another in the exact same industry with a 21% advantage.  

I've read up on the history of credit unions, how they started and why there were exempt from taxes since 1916...yes 1916, not 2016.  But many of those reasons no longer exist today.  Banking and lending institutions are readily available to pretty much everyone across the United States with both online services and brick and mortar buildings.  In fact, the only "disadvantage" (translated rule) that I found that credit unions currently have versus banks is that they are restricted in what percentage of their loan portfolio (the money-making side of banks) can be made to commercial/business customers.  

And keep in mind that while yes, bank lobbyists are pushing for a tax on credit unions (or tax relief on banks), credit union lobbyists are pushing Congress to increase the limit of how much business lending (sometimes more profitable than consumer lending) they can do.  Look, I don't mind if they want to play the same game we play.  I just want us all to play by the same rules.  Nearly all regulations from our governing bodies are the same and many services are virtually identical (mortgages, personal loans, checking, saving, etc.).  In fact, I bet that if the average person didn't see the name on the building or bank statement, they wouldn't know if it was a bank or a credit union.  

And don't allow people to act like all banks are Wall Street mega banks.  Many are regional, state wide, or even smaller community banks locally and even privately owned by groups of shareholders that live in Main Street not Wall Street.  We don't want an unfair advantage, but business is hard enough without having an unfair disadvantage too.  Just give us all a level playing field with credit unions paying taxes which will do two things:
1.  Increase funding for the federal government OR lower individual federal income taxes
2.  Increase competition among businesses which usually results in a win for the most important person, the customer. 
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