Let's set the record straight on credit union's ASU stadium naming deal

The recent call by American Bankers Association, the for-profit banking industry’s lobby arm, for Congress to end the federal income tax exemption of competitor credit unions rings hollow and rather self-serving.

The bankers’ misguided reasoning is that credit unions are growing, and offer some of the same services as banks, such as home and car loans, savings opportunities and credit cards.

To press its case, the bank lobby questions credit unions’ support of Arizona’s students — the state’s future — through venue naming sponsorships, saying that funding should be redirected to taxes.

The opposite is true.

Why credit unions are tax exempt

Arizona’s colleges and universities are economic engines in their communities, some of them the largest and most respected higher education providers in the county. They are readying the next generation to help businesses and people thrive.

Investing in students is an honor and a responsibility that credit unions are proud to get behind.

The point on credit unions’ tax exemption that the bankers overlook is that federal law established credit unions to provide consumers with a choice in the financial services marketplace and to balance the nation’s credit structure.

Credit unions should serve the poor: Not throw cash at stadiums

It is credit unions’ not-for-profit, cooperative structure that determines the federal income tax exemption — not how many people prefer them as their financial services providers, and not the products and services they offer.

This tax exemption has been upheld every time the bankers have challenged it.

Why? Because in state capitals and in the Beltway, it’s clear that the benefits credit unions deliver to people and communities exceed any dollar amount a federal tax on them would generate.

We serve people that many banks can't

Last year, credit unions serving Arizonans delivered a $3.7 billion boost to the state’s economy. This was the result of member benefits such as lower loan interest rates that credit unions as not-for-profits are often able to offer.

Add in the ripple effect when members spent those savings in the economy, and the jobs credit unions provided or supported for working Arizonans.

Moreover, credit union members intentionally choose the not-for-profit financial services model because they want to be part of something bigger, part of the cooperative movement.

They are proud to see credit unions in their communities every day, providing free financial education and volunteering for community organizations.

While growing in popularity with consumers, and for good reason, credit unions stay true to their “people helping people” mission.

They say “yes” to consumers whom for-profit financial institutions cannot serve, extending more lenient credit, offering financial counseling and setting people on a path to brighter financial futures.

Of the 35 credit unions headquartered in Arizona, 26 are low-income designated, meaning that more than 50% of their actual members are recognized as low-income by the National Credit Union Administration, the federal agency that regulates credit unions.

No wonder more than 2.2 million Arizonans trust them as their financial services partners.

A deal with ASU offers much more

Let us set the record straight on sponsorships of university sports or entertainment venues.

These sponsorships enable much-needed benefits to universities and their students, such as helping to expand or continue athletic programs, funding scholarships based on financial needs, athletic ability or academic achievement, and fostering community volunteer partnerships between the credit union and the college or university.

Mountain America Credit Union’s recently signed partnership agreement with Arizona State University — a focus of the bankers' animus — includes:

• student scholarships,

• financial education programs,

• donations of shoes to community members in need,

• internships for student athletes allowing them to build financial skills and experience,

• and monetary contributions to the Sun Devil Club for field goals made.

These investments are about more than a name on a sign — they are about a footprint in a community that credit unions care about.

We believe credit unions’ federal tax exemption has proved its value every day in households, businesses and on main streets across the state.

The not-for-profit, cooperative credit union model is a choice you should consider if you’re not already a member.

Troy Stang is president and CEO of GoWest Credit Union Association and is a Valley of the Sun resident. Reach him at tstang@gowest.org.

This article originally appeared on Arizona Republic: ASU stadium naming deal was a smart move for credit union