Summary of April 2007 GAO Report on Selected Issues Concerning Banking Activities

[struggle4progress]

In September 2006, Congressman Bernie Sanders of Vermont requested that the Government Accountability Office conduct a study of "(1) selected federal expenditures, policies, and programs that affect the U.S. banking industry and (2) certain banking industry trends" ...

Therefore, the total costs to the taxpayer of resolving the savings and loan crisis, in 2006 dollars, are:
Resolution costs born by taxpayers: $166 billion
Interest costs born by taxpayers: $272 billion
Total FSLIC bailout costs born by taxpayers: $438 billion ...

Banks are significant users of Subchapter S status, which allows them to bypass corporate income taxes ...

In total then, the current value of tax preferences for banking institutions is in the range of $1.3 billion and $1.9 billion per year ...

Over the past ten years, net income after inflation has increased more than twice as fast at banks and thrifts than at credit unions. The inflation-adjusted annual growth rate for net income was 7% at banks, 8% at thrifts, and 3% at credit unions ...

Banks are very, very profitable, with high and growing profits levels. This certainly puts the lie to the bankers’ contention that the existence of credit unions is putting a damper on successful bank operations. If bankers are not content with the very strong profit performance of the past decade, one wonders if anything could satisfy them ...

http://www.cuna.org/initiatives/gao/gao_summary.html