Tucker/My Turn: Local banks a different breed
I’d like to clear up a misconception that Ms. Suzette Snow-Cobb tried to perpetuate in the July 13 edition of this newspaper in her “My Turn” article.
While yes, some banks are stockholder-owned, a great many banks here in Massachusetts (70 percent), including the two Greenfield-based banks, are mutual organizations with no stockholders. Our banks exist to serve our local communities and our depositors.
Greenfield Co-operative Bank (GCB) is a true co-operative where our depositors are members. We continue to exist only because our depositors trust us to do right by them and their deposits. GCB is not afraid of competition. I personally have no problem with credit unions that have continued with their traditional role of serving persons with a common bond receiving some tax breaks. This is the case with truly local credit unions like Franklin First FCU. I have always respected Martha Richardson and her organization for what they have accomplished over the years. My issue is with the large credit unions that use the federal and state tax break not to serve their members, but to spend on things like naming rights to the Worcester Centrum.
Ms. Snow-Cobb was mistaken about two other statements she made: First, mutual banks, like credit unions, can only raise capital through retained earnings as well. These earnings are used to pay very competitive rates while our depositors’ money is fully insured and safe and sound. In fact, if you actually looked at certificate of deposit rates paid by GCB and the credit unions, you will see that our CD rates have been better, or at least as good, as compared to credit unions.
Second, under current law, banks cannot convert to credit union charters.
In summary, the point I was making in my interview with Richie Davis is that for those larger credit unions that want to do business exactly like banks, with no real common bond among members, they should pay taxes like the rest of us do. That federal and state income tax waiver is money coming out of the pockets of ordinary taxpayers, money that could help pay for such essentials as education and transportation infrastructure. The un-level playing field that large credit unions use impacts tax paying local banks and individual citizens alike. Instead of simply reducing or eliminating federal and state support for many important social programs, shouldn’t Congress and the Commonwealth of Massachusetts look at the income made by these larger credit union businesses as another way to ensure everyone pays their fair share?
Michael E. Tucker, Esq., is president & CEO of the Greenfield Co-operative Bank.