DES MOINES, Iowa (2/5/13)--If credit unions lose their tax-exempt status, the U.S. economy would lose the only financial institutions that are motivated by a desire to serve people, according to an opinion-editorial by the head of the Iowa Credit Union League.
Better rates and lower fees saved Iowans more than $76 million in 2012, wrote Patrick Jury, president/CEO of the Iowa Credit Union league, in a Saturday op-ed in The Gazette.
Defending the credit union tax exemption is the Credit Union National Association's No. 1 priority this year, CUNA President/CEO Bill Cheney has said. Several credit union leagues such as those in Ohio and Oregon are monitoring tax reform proposals in their states.
"Consumers benefit by having credit unions in the financial marketplace," Jury wrote. "While Iowa credit unions make up only 10% of this market, this competition creates a better environment for consumers and keeps bank fees from getting even more outrageous. The bankers do not like this competition, and are attacking the credit union tax status, claiming that increasing taxes on credit unions would help solve America's fiscal woes. Bankers want to raise the taxes of Iowa's credit union member owners."
Banks are pointing to national economic challenges as the rationale to tax credit union members, which just makes their claims more outlandish, Jury added. The idea that the banks would advocate for an increase of taxes--after [the Troubled Asset Relief Program] and the taxpayer bailout--on any Iowan "is self-serving," he said.
"Increasing taxes on credit unions increases taxes on Iowa credit union members," Jury wrote. "Credit unions would have to pass along the increased expense to their members in the form of higher fees, higher loan rates and lower savings dividends. There would be no incentive for credit unions to remain not-for-profit and our economy would lose the only sector of the financial industry that is not driven by profit, but, instead, a dedication to serve its members."
To read the op-ed, use the link.