Mountain West Credit Union Association President/CEO Scott Earl responded to an editorial questioning the credit union tax status Thursday, correcting a number of inaccuracies and clarifying the intent of credit unions’ tax treatment. His response appeared in the East Valley Tribune.
“From their inception, credit unions have been not-for-profits not only because they offer service where it has been lacking or withdrawn, but also because they are cooperatives,” Earl wrote. “This means they are democratically owned by every single account holder at the credit union. In their boardrooms are member representatives making each decision – including compensation – to the benefit of the credit union’s membership rather than stockholders.
“Arizona’s credit unions are both not-for-profit and cooperatives. Like all cooperatives, credit unions are member-owned and self-governed by the Arizonans who use our services. By definition, all credit union funds are reinvested into the families and communities that we serve – not sent to shareholders like for-profit banks,” he added.
Last year, more than 1.5 million Arizona credit union members saved more than $142 million through better rates and lower fees, benefits equivalent to $95 per member.
Earl also noted that changes to the credit union tax status weren’t addressed by Congress during the months of tax reform negotiations, nor have they altered it in previous decades whenever the tax status was questioned.
“Without question, credit unions improve the financial lives of consumers and provide clear benefit to Arizona communities,” he said. “The existence of credit unions in the marketplace is beneficial to every American because it makes bank pricing more consumer-friendly than it would were credit unions not an option.”
Continues preservation of the credit union tax status is one of the four primary pillars of CUNA’s bold advocacy agenda in 2018, which has a goal of revolutionizing the operating environment for credit unions.