WASHINGTON (4/15/14)--It's tax day and what better day is there, asks Credit Union National Association President/CEO Bill Cheney, to remind credit unions and their members that the tax treatment of credit unions continues to serve the purpose for which it was created--namely, to create substantial financial benefits to members and to the public, far in excess of the cost.
"Every April 15, we should all be mindful of our tax exemption, and remind our members and our communities that Congress should not tax credit unions because doing so would represent a tax increase on 99 million Americans. It would likely lead to the elimination of many, if not most, credit unions," Cheney says.
According to the latest numbers and estimates gathered by CUNA:
- The benefits that credit unions provide to both members and others--amounting to an estimated $8.5 billion in 2013 alone--far exceed the total annual tax that could be raised by taxing credit unions (less than one-tenth of that amount, on average, annually).
- Those benefits are realized by credit union members in the forms of higher returns on savings, lower rates on loans, and lower or fewer fees than members would have paid or received had they been customers at other financial institutions. Those totaled $6.1 billion in 2013.
- In addition, several independent researchers have found that credit unions have a moderating influence on bank pricing: raising bank deposit interest rates and lowering bank loan rates. Based on this research, CUNA estimates that bank customers saved about $2.4 billion in 2013 from more favorable pricing due to the presence of credit unions in their local markets.
- Over the past eight years credit union benefits have totaled an estimated $87.3 billion.
The CUNA leader noted the recent decision by the House Ways and Means Committee to leave intact the credit union tax exemption in the committee's proposed tax reform plan, and thanked committee members for doing so.
"Thanks to Chairman Dave Camp (R-Mich.) and ranking member Sander Levin (D-Mich.) and rest of the committee for maintaining our tax status," Cheney said. "Repealing the credit union tax exemption would result in negative consequences for savers and borrowers, the most severe of which would be the erosion of a credit union option for millions of Americans. Credit unions must continue to remind their lawmakers, and the public, of the importance and value of the tax exemption."