ST. PAUL, Minn. (10/25/13)--Mark Cummins, president/CEO of the Minnesota Credit Union Network, defended the credit union tax status in a letter to the editor that appeared in the Oct. 21 issue of the St. Cloud Times. Cummins emphasized that eliminating credit unions' exemption from corporate income tax "represents the most serious threat to our industry, farmers and communities that we've faced."
Cummins' letter was in response to an earlier letter in the St. Cloud Times that suggested credit unions be taxed the same as banks. As noted by Cummins in the letter, the debate comes at a time when the nation's tax-policy writers are considering a "blank sheet" approach to tax reforms, where each entity has to make the case for having their current status extended.
"Congress is taking a close look at all tax exemptions, including credit unions' exemption to corporate income tax," Cummins wrote.
Credit unions emphasize communities before profits, Cummins added. "Any benefits received from the exemption are passed to members," he wrote.
"In fact, every $1 of credit unions' corporate income tax exemption puts $10 into the pockets of members and communities. Credit unions also pay millions of dollars in property, sales and payroll taxes each year."
Because of their cooperative structure, credit unions offer generally lower interest rate loans and reduced fees, Cummins wrote. "The substantial savings Minnesota credit unions provide to consumers far outweigh any revenue that would be raised by taxing credit unions," he added.
"Eliminating the credit union corporate income tax exemption would result in a tax increase on 1.5 million Minnesotans and ultimately could lead to less consumer choice."
He urged Minnesotans to contact their lawmakers in support of preserving the credit union tax status.
The Credit Union National Association has created a "Don't Tax My Credit Union" campaign to help credit union advocates, including their members, contact lawmakers with that message. (See the resource link.)
To read Cummins' letter use the link.