Once upon a time, people could only join the PenFed credit union if they shared a “common bond” with other members through an affiliation with the military. Such restrictions were once offered as a reason large credit unions were exempt from paying federal taxes.
How things have changed.
Tysons, Va.-based PenFed rolled out a splashy $50 million ad campaign in five states, Puerto Rico and the District of Columbia touting its “great rates for everyone.” And by that, they really do mean everyone. Old restrictions for membership no longer apply at PenFed and other large credit unions that do not pay federal income taxes. Membership, PenFed proudly points out, is literally open to all.
While the campaign touts some of PenFed’s bank-like characteristics, it fails to mention that banks meet tougher regulatory standards than credit unions, and the fact that banks actually pay federal income taxes.
PenFed’s big marketing push comes just months after the $24 billion credit union established a “common bond” with the advertising industry by buying its own ad agency. It acquired WHITE64, also of Tysons, Va., in September of 2019. The agency has more than 50 employees and its leaders said at the time of the acquisition that they expect the firm to continue to grow their staff under PenFed’s umbrella—while they continue to serve other commercial clients like Hilton.
Still unclear – whether PenFed’s new in-house ad agency gets to stop paying federal taxes as well. Taxpayers, who effectively subsidized the acquisition, should want to know.