Don't Tax My Credit Union
We want to make you aware of a challenge credit unions are facing. As you probably know, legislators in Washington, D.C. will be considering tax reform over the next few months as part of a broader deficit reduction strategy. Banks and their trade associations have seized the moment to raise questions yet again about the fact credit unions are exempt from paying corporate income tax. They’re arguing as they have in the past that credit unions aren’t contributing equally.
You should know credit unions have been exempt from corporate income tax for several reasons:
- Credit unions operate as not-for-profit entities and generally use their earnings to maintain higher capital levels than banks and to offer better rates on deposit and loan products.
- Credit unions pay payroll, property and other taxes.
- They contribute meaningfully to the economy by helping consumers keep more of their hard-earned wages.
- They serve as another source of consumer credit in the marketplace and provide needed competition to keep other providers in check.
If credit unions lose this exemption, there will be little incentive for institutions to continue to operate as such. Credit unions already contend with significant restrictions on whom they can serve and what they can invest in.
Although Congress has ratified our exemption a number of times over the years, we’re concerned about the current situation. More than anything, we fear credit unions will get lost in the shuffle. There is a risk that legislators won’t prioritize this exemption as highly as others they deem important. So, it’s more critical than ever to let them know why the exemption still matters.
The Credit Union National Association is actively meeting with legislators on this issue, and we’re encouraging all employees and members to write to their representatives to state our case. Please contact your representatives today at www.DontTaxMyCreditUnion.org.
Thanks in advance for taking the time to help us with this important initiative. It’s critical to members and to the ongoing success of our credit union.