Good afternoon.
I am writing to help set the record straight on our nation’s credit unions. Recently, those representing our nation’s mega banks have launched yet another assault to distort the facts about our nation’s credit unions. One of their ads absurdly states, “Our country faces a financial crisis and credit unions refuse to help.” This is a remarkable and ironic statement considering the nation’s banks are the ones that engaged in the risky lending that led to the financial crisis to begin with. In fact, their ads fail to mention that the banks they represent were bailed out by the American taxpayer to the tune of hundreds of billions of dollars through the TARP program because of the large number of subprime loans that they gave to hard-working Americans.
Despite what the bankers want you to believe, credit unions do pay many taxes (such as property taxes, federal payroll taxes, etc). The bankers also ignore the fact that nearly one-third of banks are Subchapter S corporations that don’t pay federal taxes themselves – a tax break worth billions to the bankers.
As the banking trades desperately continue to distort the true value of the credit union tax exemption, I hope you will take a closer look at the facts and read the economic study released last year that shows the benefit credit unions provide to consumers, businesses, and the U.S. Economy. The total benefit of the credit union federal income tax exemption to U.S. consumers is over $10 billion per year.
As also evidenced by the study, altering the tax status of member-owned credit unions would have a devastating impact not only on the 95 million credit union members across the country, but also on consumers in general. Eliminating the credit union tax exemption would result in the loss, on average, of over 150,000 jobs a year over the next decade, a shrinking of the GDP and a net loss of revenue to the federal government.
If you have additional questions about the credit union tax exemption or other legislative issues impacting credit unions, please feel free to contact me at (703) 842-2204 or bthaler@nafcu.org.
Sincerely,
Brad Thaler
Vice President of Legislative Affairs
National Association of Federal Credit Unions