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Letter: Banks thank Schultz for column on income tax differential between banks and credit unions

Letter: Banks thank Schultz for column on income tax differential between banks and credit unions

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The community banks in Crawford County thank Sen. Jason Schultz for his March 19 column that thoughtfully stated his job as chair of the Senate Commerce Committee is to provide a fair and competitive environment for all Iowa businesses so they can prosper and effectively serve their communities.

Sen. Schultz used the significant income tax differential between banks and credit unions as an example. The income tax exemption for credit unions made sense when they were created 100 years ago for the specific purpose of providing consumer loans to people who shared a common bond. But, unfortunately, some credit unions have strayed from that mission and function as tax-exempt banks.

For example, the largest credit union in Iowa — GreenState Credit Union — is larger and more profitable than Iowa’s biggest bank and significantly larger and more profitable than all the banks in Crawford County combined. In 2020, GreenState enjoyed $115 million in tax-exempt profits — none of which found its way to GreenState’s so-called “owners”. Instead, the profits were used to pay million-dollar-plus salaries to GreenState executives, run statewide advertising campaigns, and buy taxed bank competitors, permanently removing them from the state’s tax rolls.

Why should Crawford County residents care? The median household income in our county is $53,609 and the average state and federal income tax paid on those earnings is nearly $6,772. When a mega credit union making $115 million pays less income tax than the average household, everyone else picks up the tab for the services it enjoys but doesn’t help support.

Sen. Schultz is looking out for the taxpayers in his district — not a multimillion dollar credit union that continues to enjoy all the profits and none of the responsibilities of doing business in this state. Thank you, Sen. Schultz, for speaking the truth in your own words.

Chad Leighty, Regional President, Bank Iowa

Troy Wessel, CEO, Crawford County Trust & Savings Bank

Frank Powers, President, Defiance State Bank

Owen Bolte, President/CEO, United Bank of Iowa

Matt Lujano, President, CEO, Westside State Bank

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