Community Banks say they're not getting a fair shot


Experts say community banks are in trouble because credit unions are competing for their customers -- while tax exempt. Critics say the exemption has long outlived its usefulness and now amounts to corporate welfare for the credit unions.

John Heasley with the Texas Bankers Association says community banks can't compete.

"For any of your listeners that have small businesses, if you had to compete with somebody that didn't pay taxes, they'd have an automatic advantage in that situation."

Heasley says credit unions were created to serve small groups, but they take everyone now.

"If you're taking care of the teachers or a particular manufacturer's employees that's okay but once you open yourself up to anybody who can walk in the door and you offer the same bank-like products you usually have to be taxed like a bank."

Heasley says Congress has to fix this, but there's no guarantee it will.

"There are over a dozen credit unions in the state that are over a $1-billion -- and some are over $5 billion in assets -- and most community banks are under $500-million and it's tough to compete in that environment."

Community banks are expected to serve small businesses and critics worry faltering community banks will be bad news for the small business community.


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