WASHINGTON—Credit unions created $15 billion in financial benefits to members and non-members alike during 2017, and overall contributed $116 billion in valued added or economic activity to the U.S. economy, according to a new white paper from CUNA. The paper was written as part of a broader perspective on the tax-exempt status of U.S. credit unions.
“Credit unions’ tax status was conveyed in the earliest days of the American tax code to support and sustain a system of cooperative financial services that would provide an alternative to the for-profit banking sector and promote members' best interests,” said CUNA President/CEO Jim Nussle in a statement. “Alterations to that tax status would threaten the survival of the nation’s 5,700 credit unions, erode the financial well-being of 110 million credit union members and result in the loss of the broader benefits credit unions provide to society, such as promoting small business investment and financial literacy.”
Other Points Made
Other points made in the white paper include:
- The Office of Management and Budget’s most recent estimate of the credit union “tax expenditure” (that is, what the tax exemption costs the Treasury) is $2.9 billion in 2017. This figure is expected to decrease by 40% (to roughly $1.7 billion in 2018) due to the 2017 Tax Cut and Jobs Act
- The benefits that credit unions provide to members and others far exceed the credit union tax expenditure, amounting to an estimated $15 billion in 2017 alone.
- Credit unions paid roughly $17 billion in other federal, state and local taxes in the most recent tax year
- “Any new tax on credit unions represent a tax increase on the 110-million members of credit unions – who collectively paid an estimated $1.4 trillion in state and federal income taxes in 2016,” CUNA wrote. Income taxes on these not-for-profit institutions would offset only 0.4% of the federal government’s budget deficit, according to the paper.
- CUNA calculated that in 2017 credit unions contributed $116 billion in valued added or economic activity to the U.S. economy
- Sixty-one percent of credit union members, who rely primarily on their credit union, have annual incomes between $25,000 and $100,000
- Due to their lower risk profile, credit unions continued to lend during the recent financial crisis—even as other financial institutions failed or had to curtail operations due to damaged balance sheets caused by riskier practices leading up to the crisis