news.cuna.org/articles/106014-cu-tax-status-public-benefits-laid-out-in-nussle-letter-to-house

CU tax status' public benefits laid out in Nussle letter to House

May 20, 2015

WASHINGTON (5/20/15)--CUNA continues its proactive advocacy approach by reaching out to U.S. House tax policymakers who have mentioned tax reform as one of their top priorities.

 

Protecting the credit union tax status is a top priority for CUNA, which led President/CEO Jim Nussle to reach out to House Ways and Means Committee leadership Tuesday.

“Credit unions are Americans’ best option for financial services, and the credit union tax status represents one of the best investments that the government makes in its citizens,” Nussle wrote in a letter sent Tuesday. “We urge Congress to retain and reaffirm the credit union tax status.”

Among the benefits that come with credit unions’ not-for-profit cooperative model include:

  • Sustaining a system of cooperative financial services that amounts to an estimated $10 billion in financial benefits to credit union members and others in 2014 alone, including $8 billion saved in the form of lower fees and higher deposit account interest rates;
     
  • Nearly half of credit union branches are located in community development financial institutions investment areas. More than half of credit union members who rely primarily on a credit union have incomes between $25,000 and $75,000; and
     
  • A lower risk profile that allowed credit unions to continue lending during the recent financial crisis, while other institutions pulled back on lending, having used riskier practices.

Nussle added that taxing credit unions would likely make most credit unions disappear, while only adding an amount equivalent to 0.05% of 2014 government spending from those taxes.

Last year House Ways and Means Committee Chair Rep. Dave Camp (R-Mich.) introduced the Tax Reform Act of 2014 (H.R. 1), which retained credit unions’ tax status.

“This reflects what we believe is the committee’s deep understanding that the structure and mission of credit unions are the bedrock upon which the tax status is based and what makes credit unions unique within the financial services sector,” Nussle wrote.