DENVER (8/30/13)--Credit unions deserve to keep their non-profit tax status because consumers "unequivocally benefit" from their presence in the financial services marketplace, said a Colorado credit union CEO in a Wednesday op-ed in The Denver Post.
"The banking industry pretends that banks and credit unions are essentially the same, since they provide similar services, like checking and savings accounts, car and small-business loans, and mortgages," wrote C. Alan Peppers, president/CEO of Westerra CU in Denver.
"But the two are very different," he added. "Banks, like other corporations, are owned by shareholders and managed to produce a profit. Credit unions, on the other hand, are member-owned cooperatives. They have a long history of providing financial services primarily to middle- and working-class families.
"Credit unions are run democratically, serving the needs of their members exclusively," Peppers wrote. "They don't set out to generate profits. Instead, they return their earnings to their members in the form of better rates on deposits, lower rates on loans, and reduced fees."
As an example, Colorado credit unions offer four-year used-car loans at an average 3.2% interest rate, compared with an average of 5.25% charged by Colorado banks, Peppers said. With a $15,000 car loan, that equates to nearly $2,000 in savings at a credit union during the life of the loan, he explained.
"Coloradans unequivocally benefit from the presence of non-profit credit unions in the financial services marketplace. Forcing them to pay new taxes would rob consumers of millions of dollars in benefits--and consequently hamstring our state's economy," Peppers concluded.
Credit unions and their members nationwide are engaged in a "Don't Tax My Credit Union" campaign urging Congress not to eliminate credit unions' tax exemption for corporate income. For more information, use the link.