DES MOINES, Iowa (5/11/15)--Comparing the NFL, a mega-franchise in the United States, to the credit union movement feels a little incongruous.
No wonder Pat Jury, president/CEO of the Iowa Credit Union League, wrote to the Des Moines Register recently to clarify a few misnomers used in an editorial comparing one of the largest brands in this country to credit unions as part of an argument for stripping additional organizations of their not-for-profit tax status.
“Iowa’s credit unions are both not-for-profit and cooperatives,” Jury wrote. “Like all cooperatives, credit unions are member-owned and self-governed by the Iowans who use our services. By definition, all credit union funds are reinvested into the families and communities that we serve, not sent to out-of-state shareholders like for-profit banks.”
Jury also spelled out how credit unions improve the financial lives of consumers and provide clear benefits to the communities they serve. Last year, Iowa credit union members saved $104 million through better rates and lower fees compared with what they would have paid for the same services at for-profit banks.
The league president also reminded readers that credit unions in Iowa and nationwide do, in fact, pay taxes, including sales taxes, property taxes, moneys and credits taxes and employer-related taxes.
“Increasing the taxes already paid by credit unions is merely an increased tax on Iowa credit union members,” Jury said.
Not to mention that if any entity should be scrutinized in terms of the taxes they pay, it should be for-profit banks, he added.
“Subchapter S status allows banks to substantially reduce their tax burden while continuing to charge Iowans excessive rates and fees,” Jury wrote. “In fact, 60% of banks in Iowa do not pay federal taxes because they choose to structure as a Subchapter S corporation.”
As a result, Jury said, 193 of Iowa’s 322 banks have designated themselves Subchapter S and, consequently, cost the federal Treasury $55.2 million in lost revenue.