The Wisconsin Bankers Association and Wisconsin Credit Union League had different takes after Landmark Credit Union announced last week it had reached an agreement to purchase American National Bank-Fox Cities.
The day after the acquisition was announced, the Wisconsin Bankers Association issued a release critical of the transaction.
“Taxpayers should be urgently alarmed about this acquisition,” said Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association in the release. “Unlike banks, credit unions do not pay any state or federal income taxes. This transaction alone will result in an estimated $850,000 in lost annual federal tax revenue.”
Credit unions are exempt from corporate income tax because they are not-for-profit financial cooperatives. The Credit Union League said the cooperatives return profits to their members through lower loan rates, lower fees, and specialized financial services.
“Today, Wisconsin’s credit unions make up just 23% of the financial institution deposit market share in the state. Longtime members and Wisconsin communities know the power of the credit union structure and governance, and we’re thrilled the customers of the bank will soon, too.” said Sarah Wainscott, President & CEO of The Wisconsin Credit Union League.
The Credit Union League added that banks organized as S-corporations – including American Bank-Fox Cities – also do not pay corporate income taxes. It pointed out that 31 of 36 bank sales since 2020 were bank-to-bank acquisitions.
Oswald Poels argued: “The transaction illustrates that the merger and acquisition process is clearly broken. No tax-paying bank has a fair opportunity to keep a tax-paying bank on the tax rolls with large, multi-billion-dollar credit unions at the merger table offering ridiculous multiples to secure a deal.”
