WATERLOO, Iowa (12/31/12)--An Iowa newspaper's account of the battle over credit unions' tax status features a credit union and the Iowa Credit Union League pointing out credit unions' not-for-profit structure and citing Credit Union National Association (CUNA) estimates on how much credit unions benefit consumers in the state.
Veridian CU CEO Jean Trainor and Justin Hupfer, league vice president of government affairs, in an article in the Waterloo-Cedar Falls Courier (Dec. 27), defended credit unions' tax exemption against attacks by the Iowa Bankers Association.
"The reason we have a different tax structure is that we have a different structure, period," Trainor told the newspaper in an editorial board meeting. Trainor noted that credit unions are member-owned and have a volunteer board, while banks are owned by stockholders and have a paid board of directors. The banks' profits go to their stockholders. Credit unions' lower loan rates translate to an increase in dividends paid to all members or better services if there are excess earnings, she said.
"Nothing has changed since we were created back in 1934. We're still owned by our members," said Trainor in the article. Waterloo-based Veridian is the largest credit union in the state, with $2.02 billion in assets.
The league's Hupfer told the newspaper that members are the main beneficiary of lower tax rates since credit unions are not for profit. He cited CUNA's June survey that showed Iowa credit union members in the previous year received $75.9 million in benefit when compared with the state's banks. The benefit is based on credit unions' lower rates for loans, higher savings rates and lower fees.
Trainor also defended credit unions' push urging Congress to pass legislation that would raise the member business lending cap for credit unions to 27.5% of assets from 12.25%. The bill is important nationally for credit unions because small businesses have been telling them that it is more difficult to get a business loan from a bank since the recession. She noted credit unions want to raise the cap so they can meet the needs of their members.
CUNA estimates that raising the cap would generate $13 billion for new small business loans and 140,000 new jobs the first year, without cost to the taxpayer.
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