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By advocating for their outdated tax exemption, credit union lobbyists are advocating for a tax increase on every business in America.
August 22
The bankers are up to their same old shenanigans when it comes to their attacks on credit unions, as is evidenced in a recent
As Congress begins the process of reviewing and rewriting the nation's tax code, the banking industry is crying foul against the nation's credit unions for myriad reasons all without merit.
They claim the "Blank Slate" tax reform approach being talked about on Capitol Hill should threaten the credit union tax exemption, yet over the district work period in August a number of key lawmakers from across the country threw their
Bankers claim that credit unions' federal income tax-exempt status provides an unfair advantage. They also claim that credit unions are getting in the way of their lending and say credit unions don't need access to more capital for their members.
Let's set the record straight.
Credit unions do pay taxes. Though credit unions are exempt from federal income taxes, they still pay many taxes, like payroll and other state and local taxes. What the bankers aren't telling you is that over
Bankers complain that credit unions have an unfair advantage if so, why have
Furthermore, while the bankers complain that credit unions are affecting their lending, the truth is far different. A study commissioned by the
A report released by the Special Inspector General for the Troubled Asset Relief Program found that of the 332 banks that participated in the
Credit unions benefit all Americans. A 2012 independent study released by the
The reality is that the credit union federal income tax exemption benefits credit union members and bank customers. Credit unions provide a check on banks through their competitive rates and fees. In fact, the exemption results in more than $10 billion in economic benefits annually for all Americans
Furthermore, any effort to strip credit unions of their federal income tax exemption will have a drastic and immediate negative impact on more than 5.5 million current and former military members, their families and survivors. As noted in a
Credit unions exist to serve their members. While credit union membership has certainly grown since the passage of the Federal Credit Union Act in 1934, the credit union business model used then is the same one in use today. Credit unions aren't in business for profit. They are run by their members, for their members not shareholders. Whatever "earnings" are made at a credit union go right back to its members in the form of higher dividends and lower rates and fees.
If the bankers want the advantages of being a credit union, they should convert, not try to destroy a proven, valued business model.
B. Dan Berger is president and CEO of the National Association of Federal Credit Unions.