Pub. 6 2011-2012 Issue 2

www.nebankers.org 18 Extraordinary Service for Extraordinary Members. According to a recent report by the President’s Eco- nomic Recovery Advisory Board, the tax exemption given to credit unions will cost the federal government $19 billion through 2017. A consultant for the American Bankers Association projects the FCS tax exemption will cost taxpayers at least another $10 billion in the same time period. Community banks are now assessed premiums by the FDIC to pay for the banks that fail, so that taxpayers are not picking up the tab. Adams Bank’s FDIC premium is budgeted at more than $800,000 this year, which equals about 15 full-time employees. FCS is a government- sponsored entity (GSE), much like its siblings, Fannie Mae and Freddie Mac. Yet none of the cost of Fannie Mae or Freddie Mac losses was assessed to the FCS, and taxpayers are now absorbing approximately $400 billion in losses. Despite what many would have you believe, credit unions are not safer than banks. Several of the largest credit unions have failed or been placed in receivership. In addition, the current financial status of credit unions is not as transparent as banks. I am a former CPA with Chad Adams is president and legal counsel for Adams Bank & Trust in Ogallala. You may reach him at (308) 284-4071 or csadams@ abtbank.com . Q Budget Solution — continued much experience in the study of financial firms’ balance sheets and performance. As I looked into the financial “well-being” of the credit union system, I could not see the bottom. U.S. Senator Mark Udall of Colorado is currently pro- posing to grant credit unions even more authority to make commercial loans, giving the local Colorado banks even more competition when loan demand is weak. Our bank is looking for more loans, with a two-year goal of growing loans by $50 million. My strongest competition today comes from the credit unions and FCS. Before we cut more teachers, or hand the taxpayers a larger bill, our government should close these loopholes and level the playing field. Making the credit unions and Farm Credit System subject to the same taxes as commu- nity banks would result in $29 billion through 2021 that could help offset our budget woes, and perhaps even save some teaching jobs. Z