MADISON, Wis. (10/18/13)--Credit unions--even those competing against each other--are using their cooperative spirit to join together to preserve credit unions' tax status against banker attacks. In Charleston, S.C., and Eugene, Ore., credit unions worked together to deliver the Don't Tax My Credit Union message.
Two Charleston, S.C., credit union CEOs teamed up to present that message to viewers of ABC News in Charleston. Scott Woods, CEO of SC FCU, and James Gergen, CEO of CPM FCU, urged consumers to call their senator or congressman and tell staff who answer the phone, "Don't Tax My Credit Union." They also urged viewers to go to the Don'tTaxMyCreditUnion.org to weigh in on the tax issue.
"As a rule credit unions work together very well within the cooperative network. We're competitive, but there's plenty of business opportunity for everyone," said Woods, adding that credit unions "offer a greater balance of competition in the community, even for nonmembers."
Gergen noted that the Don't Tax campaign is a national effort by credit unions "to ensure financial choice remains out there for consumers and small businesses." As non-for-profits, "if we would have to pay taxes, we'd have less money to take care of the member." Credit unions have "got under banks' skin" because they pay more on deposits, take less on loans and have low or no fees, he said.
In Eugene, Ore., three credit union CEOs--Mandy Jones of Oregon Community CU, Bob Newcomb of Selco Community CU, and John D. Iglesias of Northwest Community CU-- demonstrated credit unions' "Unite for Good" collaboration to tell the value of credit unions.
Their conversation spans three videos covering credit union values, the credit union experience, and taxation. "You would not get three banks sitting in a room together trying to tell their story," said Jones. "Credit unions are united--we're all in this together."
"We have so many examples of how credit unions have returned what we earn," said Iglesias. "We make profits but what we do with that profit is the huge difference" between credit unions and banks, he said.
Banks focus on the bank statement, maximizing profit and "enriching individuals rather than giving back to the community," said Newcomb. He pointed out that during the economic downturn in 2007, credit unions increased their lending 13% while banks cut back lending 3%. "Credit unions help members solve problems not just get a payment due."
Credit unions were established "to help the common person and from our inception have been there to help meet the basic financial needs of consumers," said Iglesias. "Taxation would really effect that."
Congress is struggling with the federal deficit and has two choices: reduce expenses or increase revenues, said Jones. That raises concerns of possibly losing credit unions' tax status. "We are not tax-exempt. We do pay taxes, for property, payroll and several other taxes," she said.
"If you are taxed like a bank, some will say you may as well operate like a bank," said Newcomb. "Credit unions are an alternative to the for-profit banks. Member choice is very important."
If credit unions are taxed, "then consumer choice has gone out the door," said Jones.
The three CEOs urged viewers to visit Don'tTaxMyCreditUnion.org.
Other articles related the benefits of credit unions to communities and members and the importance of working on a united front to preserve the tax status. They included an article in the Sioux Falls Business Journal (Oct. 15), which featured popular services of local South Dakota credit unions and how their success has drawn banks' attention.
Robbie Thompson, president/CEO of the Credit Union Association of the Dakotas, noted in the article that banks and credit unions "are different models. The bank model is to generate a profit from customers for a small number of shareholders. The credit union model is cooperative, where all profits are returned back to the members who are also the owners."