WASHINGTON (7/19/13)--For years, big banks have been trying to saddle their nonprofit credit-union competitors with new taxes. They see a congressional tax reform push as their best chance to sneak such taxes in. Fortunately, some groups--including credit unions--are looking out for the interests of hardworking Americans in this tax reform debate.
So warns Credit Union National Association Chair Pat Wesenberg, who penned a guest column on the issue in Thursday's Star-Ledger of New Jersey. The author is also president/CEO of Central City CU in Marshfield, Wis.
Wesenberg's Star-Ledger column appeared the same day as an extensive tax reform article in The Hill, which underscores that "the stakes couldn't be higher" for those who fear "being on the short end" of a tax reform bill. The Hill is the largest circulation Capitol Hill publication, and has a focus on business, lobbying and federal lawmaking.
Tax policy leaders have said they will take a "blank slate" approach to reform legislation, which would remove all tax expenditures--like the credit union exemption from federal income tax--from the code and would add back in those that make the grade. It is the scenario that CUNA warned credit unions to expect and why CUNA and the state credit union leagues launched a groundbreaking "Don't Tax My Credit Union" campaign in May to defend against a tax threat.
As tax reform picks up speed in the U.S. Congress, Wesenberg writes in her column, consumers should hope that the big banks don't succeed in their credit union attacks.
"New taxes on credit unions would pick the pockets not just of their 96 million predominantly middle-class customers, but those of all Americans--by reducing competition in the financial services sector," she explains.
She reminds that while credit unions and banks offer many of the same services, such as checking accounts, savings accounts and home mortgages, they couldn't be more different in philosophy and structure.
"As nonprofit financial cooperatives, credit unions exist to benefit their member-owners. They do so by charging low or no fees and offering higher interest rates on savings and lower rates on loans. They've advanced that mission since the 1930s, when Congress authorized their creation and granted them nonprofit status.
"Banks, in contrast, are obligated to maximize profits for shareholders. And profitable they are, with some of the highest margins of any industry," Wesenberg writes.
She goes on to note that about 40% of Americans belong to credit unions today.
CUNA is urging credit unions and their members to contact federal lawmakers as they consider tax reform issues to make it clear that taxing credit unions would be against good public policy.
Through its "Don't Tax My Credit Union" advocacy campaign, CUNA provides extensive resources to inform and facilitate communications to Congress whether they are sent by mail, e-mail, or social media outlets.
Use the resource link to access the "Don't Tax My Credit Union" website.