The Golden State just got a lot more golden for a longtime Sacramento-based credit union. SAFE Credit Union has signed a $23 million deal with the city of Sacramento that includes a major boost to the credit union’s branding — putting the SAFE name on a renovated city theater and convention center. The deal will increase awareness of the credit union’s services, allowing SAFE to bring in more profit (since apparently it isn’t bringing in enough profit with its tax-exempt members’ dollars). Credit unions like SAFE continue to abuse their nonprofit status and use untaxed money to reap larger profits in the long-run. As a result of this particular deal, SAFE will earn free advertising to Sacramento city employees, secured investment of city funds and the promise of construction of a brand new SAFE plaza- all of which are certainly benefits that real nonprofits don’t get to enjoy.
The city of Sacramento’s modernization project includes an expansion and renovation of the theater and convention center, such as an improved aesthetic appeal for the theater and additional lobby space and kitchen facilities for the convention center. The city said, “SAFE Credit Union was deemed to offer the best value to the City, both financially and in terms of their ability to partner with the City and the local community,” And that’s a big emphasis on “financially” considering Sacramento conducted a two-year search to hunt down a deep-pocketed sponsor willing to spend millions to have its name in lights over the door of the convention center. SAFE chief executive Dave Roughton said the expanded convention and performing arts center “will draw more investment and create a healthier businesses community” in Sacramento – and don’t forget about a healthier wallet for SAFE too!
This multi-million-dollar deal comes as no big surprise as more and more credit unions use taxpayer-backed dollars to fund big purchases and sponsorships. Credit unions have abandoned their original mission to bring banking to the underserved and instead are finding new ways to bring more tax-exempt money into their own bank accounts. This isn’t the first time a state or local government has stepped in to make a deal that provides significant financial advantages to a participating credit union. Earlier this year, Texas governor Greg Abbott (R-TX) promised PenFed Credit Union more than $2.5 million in incentives for the credit union to establish its $48 million, 300,000 square foot regional financial center in San Antonio.
The time has come for Congress to step in and take action to put an end to large credit unions’ greedy ways. The NCUA has proven itself to be useless in actually administering consequences to deter credit unions from abusing the system to boost their own profits; in other words, SAFE’s activities will be safe until there is oversight and reform. When will we stop labelling these entities nonprofits, and put an end to the abuses of power?