SEATTLE (9/25/13)--Credit unions' not-for-profit cooperative structure and their tangible value to members were highlighted in a Fox Business interview Tuesday with Northwest Credit Union Association President/CEO Troy Stang, who discussed the credit union difference and defended the preservation of credit unions' tax status.
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Adam Shapiro, the "Business News" anchor in the segment entitled "Credit Unions Vs. Banks" noted that credit unions have 95 million members who have deposited $1 trillion--about 6% of all consumers' deposits in the nation's financial institutions--in credit unions. With tax reform, banks have renewed their push to eliminate credit unions' tax status.
"Credit unions are not-for-profit cooperatives, and as member-owners, each member--or 95 million members--would be impacted in their own wallets" if credit unions' federal corporate income tax exempt status were eliminated, Stang said. "The benefits of the cooperative structure are returned back to members and [taxing credit unions] hits not only members in their wallets" but wallets "across America," he said.
The anchor pointed out that his research indicated that credit unions provide more competitive rates, offer more credit opportunities and provide services with low fees.
"To understand a credit union is really to understand its structure and the real tangible value" to members, said Stang who noted that value amounts to $120 per American member household.
Taxing credit unions "would certainly impact the margins of operating a credit union" and thus the profits returned as benefits to members, he said, adding, "Credit unions do pay many forms of taxes such as payroll taxes and real estate taxes that support the local economy." The amount that would be collected if credit unions lost that status in an attempt to deal with the federal deficit would amount to "enough to run the federal government for about an hour," Stang said.
He also noted that "banks certainly would be interested in not having any competition on Main Street," but that "in America, it is very beneficial to have diversity in our financial landscape."
The program also reached out to the American Bankers Association but was still waiting on a response, said the anchor. To view the segment, use the link.
Credit unions and members will continue to make their voices heard on the tax status as part of the Credit Union National Association's and the leagues' Don't Tax My Credit Union grassroots campaign. They will conduct a virtual Don't Tax rally online on Oct. 2. Use the link for more information.