Credit union tax status is ‘crucial’ part of financial system
The importance of not-for-profit financial cooperatives is as significant today as it’s ever been, CUNA President/CEO Jim Nussle wrote Tuesday for a hearing discussing the proposed Treasury Department budget for FY2021.
“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. We urge Congress to retain and reaffirm the credit union tax status…Credit unions provide accessible and affordable basic financial services to people of all means and encourage the equitable distribution of capital across all individuals, families, communities and small businesses,” the letter reads. “Credit unions infuse financial market competition with multiple and differentiated competitive business models. They help keep financial services accessible – and affordable – for all consumers, whether they are members of a credit union or not.”
Credit unions annually provide $18.9 billion in total financial benefit to consumers across the country through higher savings and returns, lower loan rates, and fewer fees, benefits that extend to members and non-members.
Specifically, Nussle calls on the preservation of the tax status because:
- The tax treatment for credit unions continues to serve the purpose for which it was conveyed;
- Credit unions are different because of their structure as not-for-profit member-owned financial cooperatives;
- The tax status represents good public policy because it causes the creation of substantial benefits to the public, far in excess of its cost; and
- Taxing credit unions would represent a tax increase on 115 million Americans—taxpayers who paid a total of $1.5 trillion in taxes annually. In addition, credit unions pay nearly $20 billion in local, state, and federal taxes annually.