Small credit unions and the banking industry especially community banks are in the same boat. The issue of the large conglomerate credit unions is troublesome to local bankers as well. The credit union difference is about structure and philosophy, not size. She explains that banks create a profit and pay it to their stockholders and boards of directors. Credit unions take their earnings and provide better loan rates, higher dividends and more services to their members.
Banks have nothing to fear from credit unions, no matter the size.
The bankers also argue that credit unions have an unfair advantage because they don't pay taxes. Colodny says that credit unions do pay taxes property taxes and all local taxes. The only tax they don't pay is income tax. In terms of the bankers' contention that the NCUA's chartering rules do not stick to what Congress intended in the Credit Union Membership Access Act, Colodny points out that Congress had 60 days, until March 5, to object to the NCUA's action. They did not, prompting the ABA suit.