WASHINGTON–CUNA has sent two letters to Congress in conjunction with hearings related to FY 2021 budgets for the Treasury Department and USAID, respectively.
In the letter on USAID, which can be found here, CUNA President Jim Nussle urged Congress to ensure the U.S. Agency for International Development (USAID) awards a fair and substantial amount of its direct awards and contracts to small, U.S.-based not-for-profit voluntary organizations such as credit unions and other cooperatives.
“We urge you to ensure that the USAID commits to, and reports to Congress on, utilizing a fair and substantial use of civil society partners such as US credit union organizations in furtherance of US foreign policy and assistance mission,” the letter reads.
Additional Points Raised
Nussle further noted USAID direct funding is “increasingly concentrated with a small number of large organizations,” with 60% of its contracts and grants to 25 firms and 80% of its contracts and grants to 75 firms in 2017, according to its own report.
In 2018, the concentration among the 75 firms reportedly increased to 83%.
“It is often difficult for small U.S.-based non-profit organizations such as World Council of Credit Unions to access to USAID funding. WOCCU is uniquely situated to assist USAID in addressing the geopolitical and U.S. foreign policy concerns,” Nussle wrote. “The WOCCU network delivers private assistance and training through 70,000 volunteers and 300,000 employees at United States local, community-owned credit unions.”
Letter on Treasury Budget
Separately, Nussle stated in the letter on the proposed FY 2021 budget for Treasury, “Credit unions are Americans’ best option for financial services, and the credit union tax status represents one of the best investments that the government makes in its citizens. We urge Congress to retain and reaffirm the credit union tax status…Credit unions provide accessible and affordable basic financial services to people of all means and encourage the equitable distribution of capital across all individuals, families, communities and small businesses.
“Credit unions infuse financial market competition with multiple and differentiated competitive business models. They help keep financial services accessible – and affordable – for all consumers, whether they are members of a credit union or not,” the letter continues.
CUNA noted credit unions annually provide $18.9 billion in total financial benefit to consumers across the country through higher savings and returns, lower loan rates, and fewer fees, benefits that extend to members and non-members.
Support for Tax Status
Specifically, Nussle calls on the preservation of the tax status because:
- The tax treatment for credit unions continues to serve the purpose for which it was conveyed
- Credit unions are different because of their structure as not-for-profit member-owned financial cooperatives
- The tax status represents good public policy because it causes the creation of substantial benefits to the public, far in excess of its cost
- Taxing credit unions would represent a tax increase on 115 million Americans—taxpayers who paid a total of $1.5 trillion in taxes annually. In addition, credit unions pay nearly $20 billion in local, state, and federal taxes annually
The letter to Treasury can be found here.