WASHINGTON (10/1/14)--Credit Union National Association President/CEO Jim Nussle says that under his watch "the credit union tax exemption will be strongly and completely defended," in an op-ed published in The Hill Tuesday.
"I've done my share of reading and research in preparation for my new role at CUNA," writes Nussle, who started as head of CUNA on Sept. 22. "I know that banks and their lobbyists like to say credit unions are 'virtually indistinguishable' from banks and as such should not be exempt from paying federal corporate income taxes.
"But I've come to the conclusion that statement from bankers is just flat wrong.
"There is a strong and key distinguishing characteristic between credit unions and banks: Their beneficiaries," the former congressman from Iowa states.
Nussle notes a bank's beneficiaries are shareholders who expect as much profit to go to them as possible. At a credit union, the members--who own the credit union--are the beneficiaries.
Because of the cooperative ownership structure, any excess earnings of a credit union are redirected back to all members in the form of lower loan interest rates and higher savings yields.
"And credit unions deliver," Nussle declares. "The research that CUNA has shared with me shows credit union members in 2013 realized financial benefits of nearly $6 billion, just by saving at, borrowing from or acquiring other financial services from their credit unions, rather than from a bank."
Nussle, who served in Congress from 1991 to 2006, says he's no stranger to hearing bank complaints about credit unions' tax status and asking Congress to strike down the public policy that supports it.
He highlights the significance of the House Ways and Means Committee's decision earlier this year to leave the credit unions' tax status untouched while it hammered out a blueprint for tax reform that proposed removing more than 200 tax preferences, including some that apply to banks.
"As Rep. Denny Heck (D-Wash.) said at a recent Hill Forum: 'To keep coming to us and asking for that, waiting for it to happen, is a little bit akin to leaving the landing lights on for Amelia Earhart. Credit unions are not taxed the same as banks as a matter of policy,'" Nussle writes.
"Congress bestowed the tax exemption in 1934 based on credit unions' cooperative structure and mission to provide people with access to credit for provident purposes such as borrowing to buy a car, a home or to help finance a small business. The goal was to have credit unions compete with banks to ensure that consumers have access to affordable financial services."