Magazine article American Banker

Eye on the States: Wis. Banks, Credit Unions in Legislative Tug-of-War

Magazine article American Banker

Eye on the States: Wis. Banks, Credit Unions in Legislative Tug-of-War

Article excerpt

Wisconsin banks and credit unions are bickering over dueling legislative proposals that each side claims would unfairly broaden the powers of the other.

Credit union groups have introduced a "Super Credit Union Bill" that would give Wisconsin's 350 state-chartered credit unions the power to offer more products such as individual retirement accounts and commercial loans. The banking industry, of course, opposes the bill on grounds that it would give credit unions -- which do not pay income tax -- a 40% pricing advantage.

"This bill makes credit unions just like tax-paying financial institutions without the tax-paying part," said Harry J. Argue, chief executive officer of the Wisconsin Bankers Association. His advice to credit unions: Convert to state-chartered banks.

Meanwhile, the banking industry is promoting a bill of its own that would give Wisconsin's 330 state-chartered banks the same powers that national banks gained through the financial modernization bill that President Clinton signed into law last month.

Ronald Halvorsen, president of the Wisconsin Credit Union League, said the banks are attacking the credit union proposal "to misdirect the attention of our elected officials and the media away from their gargantuan, power-grabbing bill."

If credit unions had such a great advantage, Mr. Halvorsen said, they already would be forcing banks out of business. Calling Mr. Argue's 40% figure "ludicrous," he also said credit unions face almost as many regulations as banks and that income tax is the only tax credit unions do not pay -- because they are not-for-profit. …

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