WASHINGTON–With all the changes taking place in Congress, members of both the Senate and the House have been given a reminder on the value of the credit union tax exemption.
In a letter to the House and Senate leadership, NAFCU VP-Legislative Affairs Brad Thaler
refuted bankers’ claims that credit unions have an unfair advantage because of the tax exemption, and further noted that nearly one-third of banks are classified as Subchapter S corporations that do not pay corporate income tax. He also pointed to the taxes CUs do pay, including property, payroll and state and local taxes.
“Simply put, the credit union tax exemption is an issue of survival for credit unions,” Thaler wrote. “Despite what the bankers claim, there remain significant regulatory and statutory differences between not-for-profit member-owned credit unions and other types of financial institutions – including limits on who they can serve and their ability to raise capital.”
“With the ever-increasing regulatory burden on all financial institutions, we would hope the banking trades and their members would be more focused on working with their counterparts in the financial services industry to help Main Street and consumers get the financial services that they need,” Thaler continued.
Thaler also highlighted a study that found eliminating the credit union tax exemption would result in the loss of 150,000 jobs a year, a shrinking of the GDP and a net loss of revenue to the federal government. That study can be found at www.nafcu.org/cutaxexemption.
Thaler said NAFCU and credit unions are hopeful that the banking industry will instead join with CUs in fighting increased regulations, instead of filing lawsuits over field of membership and member business lending rules.