A credit union that enjoys an exemption from federal taxes has bought the naming rights to a 5,000-seat theater in downtown Phoenix, continuing a trend among large credit unions to stray far away from the modest mission established for the industry by Congress years ago, in favor of aggressive market expansion.
Arizona Federal Credit Union, which holds more than $1.7 billion in assets, supplanted Comerica Bank as the naming sponsor of the venue, which was renamed Arizona Federal Theatre this week. Earlier this month, Arizona FCU also announced its plans to retire the name of another financial institution, Pinnacle Bank, which it acquired. That deal, which will take Pinnacle off the federal tax rolls, is expected to be completed in 2020.
According to a recent letter from a credit union trade association to the chairman of the Federal Deposit Insurance Corporation, “The structure and mission that Congress has established for credit unions are the foundation of the corporate income tax treatment to which credit unions are subject. Credit unions have a statutory mission to promote thrift and provide access to credit for provident purposes.”
For the large credit unions that are increasingly swallowing up smaller credit unions and banks, the mission has morphed into splashy marketing tactics, such as naming professional sports arenas and theaters.
The Credit Union Times reports that Arizona Federal is the second large credit union to announce a naming deal this fall. In October, the $4.8 billion Desert Financial Federal Credit Union announced it bought the rights to put its name on Arizona State University’s University Activities Center, home to the school’s basketball, wrestling, gymnastics and volleyball teams.