Power breakfast is powerful opportunity for credit unions
March 14, 2005

It’s not often that credit unions and banks sit down at the table to talk, but in Indianapolis Feb. 25 they sat down for breakfast and a panel discussion as part of the Power Breakfast Series – Banking & Finance presented by the Indianapolis Business Journal. Excerpts from the discussion were published in the paper’s March 14-20 edition which was received by subscribers today.

Indiana Credit Union League President John McKenzie represented credit unions at the event, which was attended by more than 300 Indianapolis-area professionals. Other panelists represented the areas of law, banking and venture capital. Topics were wide-ranging, covering everything from the importance of technology in the world of financial services, the role of financial institutions in the city’s economic development efforts, and how to keep capital flowing so more small businesses can succeed. In answers to the questions that were posed to him as well as in responses to those asked of other panelists, McKenzie was able to bring the credit union message to the group, emphasizing their cooperative structure, the cost savings consumers experience by choosing a credit union over a bank, how underserved communities have benefited from access to credit unions, and their importance as a borrowing option for small business owners.

"This opportunity was a good one to showcase the credit union difference, our important role in the financial services industry and how the business community, as well as consumers, benefits from credit unions." McKenzie commented.

Of course, the "banks vs. credit unions" issue was addressed, with the moderator asking panelists whether the "playing field" was level for both types of institutions. McKenzie spoke first, explaining the structural differences for the audience. He also pointed out that because of the member-owned, not-for-profit cooperative structure of credit unions, a structure where profits are returned to the members—not to stockholders—Hoosier credit union members save about $160 million annually because of using a credit union compared to if the only option was banks. This financial benefit to consumers and small business owners is five times the amount of the federal tax exemption.

Regarding the issue of whether credit unions should pay federal income taxes, there was no argument in favor of it from other panelists. The attorney on the panel, who works with both banks and credit unions, questioned why the American Bankers Association continues to push the issue of credit unions paying federal income taxes.

In Indiana, about one in three residents is a credit union member. There are 229 credit unions in the state.

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