You may have heard that the banks and some politicians in Washington, D.C. are considering an overhaul of the federal tax code, an overhaul that could hurt credit unions on a local and national level. They say the federal budget can be balanced by taxing credit unions, even though credit unions hold only 6% of all financial assets nationwide. Can you guess who holds the other 93%? You guessed it, banks.
As a member, you know that Unitus Community Credit Union is owned and directed by you. While credit unions are regulated by federal and state governments, they are also governed by a volunteer board of directors elected by its members. Unlike banks that maximize profits for a small group of stockholders, credit unions exist to serve their members, including working families, small businesses, and the local community. Because we return profits to our members, we are able to offer higher returns on savings, lower loan rates and low to no fees. That’s why your credit union is not-for-profit and tax exempt. A tax on credit unions is really just a tax on YOU, the member.
Video & Analysis
THE DIFFERENCE BETWEEN BANKS & CREDIT UNIONS
Credit Unions are structured differently and for a very good reason…to help working families and small businesses keep more of what they earn.
KNOW THE TRUTH
As a consumer, your voice is important. Credit unions are not-for-profit cooperatives and that means your membership saves you money in fees and loan rates. Tell Congress not to tax your credit union.
New ECONorthwest Analysis Debunks Bank Claims About Credit Unions
The big banks are lobbying for more taxes against credit unions. That could tax some credit unions out of existence, wiping out your choice to belong to a cooperative financial institution.That’s just wrong. Some very accomplished economists for ECONorthwest studied the credit union model, and their report debunks the bank myths. You can read the report here.
Northwest credit unions donate millions, volunteer thousands of hours, improve financial capability of students and adults, and make reasonable loans that help people start businesses and keep their homes and cars in tough times. You can read the report here.
TAKE ACTION NOW!
We ask that you:
1. Educate yourself and others by watching the video and clicking the resource links on this page.
2. Take Action by contacting & Tweeting your U.S. Representative and Senators in Congress. Visit www.DontTaxMyCreditUnion.org and tell them not to tax your credit union.
3. Stay informed by downloading the Credit Union Advocacy App from the Apple App Store or Google Play.
4. Share your story about how Unitus has helped you. Email us, post your story on our Facebook page, or tweet us by using hashtag #DontTaxMyCU.
What’s Being Said by Banks
Banks: “Today, credit unions are a $1 trillion industry that pays no taxes.”
Credit Union Response: It’s important to note that credit unions do pay taxes, such as payroll, property and sales taxes. Only credit union income is tax exempt. That’s because Congress has long recognized the clear difference between credit unions and banks. Unlike banks, credit unions are not-for-profit and exist solely for the benefit of their respective members. Income is returned to members in the form of lower fees and higher rates of return on deposits. Banks, by contrast, are for-profit institutions and issue stock to make money for their shareholders, not their customers. Importantly, Congress has repeatedly affirmed that credit unions serve a unique “public good” to meet the financial needs of consumers, particularly those of “modest means.” (Source: Review of Credit Union Tax Exemption, Committee on Ways and Means, U.S. House of Representatives, One Hundred Ninth Congress).
Banks: “That’s nearly $2 BILLION every year that could help shrink the federal deficit.”
Credit Union Response: According to Congress’ Joint Committee on Taxation, however, taxing credit union income and jeopardizing billions worth of economic benefits would only raise $500 million in federal tax revenue. At the state level, Oregon officials estimate that removing our exemption would generate between $1 million and $4 million in state revenue per year. That figure pales in comparison to the $121 million that Oregon’s credit union members saved in direct benefits and invested back into the economy. On average, each credit union household saved $170 last year—money that members would have otherwise paid in higher bank fees.
Banks: “Now, credit unions want even more perks.”
Credit Union Response: (Currently, a credit union’s loans to businesses cannot exceed 12.25% of its assets, but the Credit Union National Association (CUNA) backs a bill reintroduced recently by Rep. Ed Royce, R-Calif., and Carolyn McCarthy, D-N.Y., that would raise the lending cap to 27.5%.) In the late 1990’s the bankers attempted to restrict our Field of Membership and prevent credit unions from literally opening any new accounts. That fight resulted in a trade-off that left us with the arbitrary cap of 12.5% of assets for Member Business Lending. No cap existed beforehand and the cap is ridiculous to be written into legislation. This type of restriction would generally be determined by a regulator if needed, not legislation. Our regulators support removing it!
Banks: “It’s time to end credit unions’ Indefensible and outdated special treatment.”
Credit Union Response: It is critical to our members and to us that credit unions remain a viable and healthy alternative to traditional banks. Banks focus on creating value for their stockholder, not the customer. Credit unions focus on creating value for our members, who benefit from consumer friendly created products and services that drive an average annual savings of approximately $170 a year for each credit union member.