N.J. voices loud, clear on protecting CU tax status
HIGHTSTOWN, N.J. (7/20/15)--More voices are coming across loud and clear in New Jersey about the credit union difference.
John Fenton, president/CEO of Affinity FCU, Basking Ridge, N.J., set the record straight regarding the credit union tax status in an “Industry Insights” post on NJBIZ.com.
In “Setting the record straight regarding credit unions and taxes,” Fenton emphasized the cooperative structure of credit unions, the ownership of credit unions by members not stockholders, and the real estate and payroll taxes paid by credit unions.
“The tax treatment conveyed on credit unions roughly 100 years ago continues to serve the purpose for which it was created and is one of the best investments that the government makes in its citizens,” Fenton wrote. “Credit unions provide substantial benefits to their members and the dollar amount of those benefits greatly exceeds the loss in federal revenue that would result from taxing not-for-profit credit unions.”
A reader of The Star-Ledger followed the theme of New Jersey Credit Union League President/CEO Greg Michlig’s July 7 letter to the editor.
“It's imperative to stress that credit unions are cooperatives, meaning they're owned and operated by their members, as opposed to stockholders,” wrote Michael DuPont (The Star-Ledger July 17). “They pass on the savings from their nonprofit status by offering higher rates on savings accounts and lower rates on loans. Banks typically charge larger fees with little or no flexibility, whereas credit unions have saved their members nearly $6.3 billion by avoiding such fees.”
In fact, Michlig’s words inspired a credit union member to write to him to share her experience with Raritan Bay FCU, Sayreville, N.J. (Daily Exchange July 17).
“I am writing to thank you for raising awareness about the benefits of credit unions in N.J.,” she wrote to the league, explaining that, due to an accidents, she recently had to apply for a car loan 18 months after a previous loan.
“If I did not have the resources of my credit union, I am not sure I would have qualified for a bank loan,” said the member, who works three jobs. “Not only that, the car loans I need are below the threshold where banks will even consider taking them ... from what I'm told."
“It is stories such as Kristine’s that continue to differentiate credit unions from other financial institutions and make the work we do worthwhile,” Michlig said. “These comments go to show that what we do is impactful and meaningful, and our members both understand and support us and our structure.”