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CEOs letter on tax status outlines benefits of CUs
ROCHESTER, Minn. (10/6/11)--A letter to the editor of Minnesota's on Wednesday from a credit union CEO outlines the benefits of credit unions while disputing bankers' attacks against credit unions' tax status. Kelly McDonough, president/CEO of $115 million asset First Alliance CU, Rochester, Minn., wrote the letter in response to another letter published on Sept. 28. "I want to clarify that credit unions are member-owned, not-for-profit financial cooperatives," McDonough wrote, adding that although credit unions are tax exempt, they pay payroll and unemployment taxes and property taxes. "Any benefits credit unions receive from their tax-exempt status are passed onto those they serve in the form of dividends. Our member-owners pay income tax on those earnings,"the letter said. "The substantial savings Minnesota credit unions provide to consumers far outweigh any revenue that would be raised by taxing credit unions," McDonough wrote. "It is estimated that each year Minnesota credit unions provide $125 million in direct financial benefits to the state's 1.5 million credit union members. These benefits are given in the form of fewer fees, lower rates on loans and higher savings rates, which translate into saving the average member $86 a year and the average member household $163 a year. "Credit unions look out for the best interests of people like nurses, teachers, firefighters and even your next-door neighbor. Furthermore, when hard times hit, we stand with our members and extend credit when others won't," McDonough concluded. Use the link to access the full letter.
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