MADISON, Wis. (7/24/13)--While the "Don't Tax My Credit Union" message was the focus Tuesday for credit unions, the mass media also took note this week of the battle to preserve credit unions' tax exemption. Credit unions and leagues told why credit unions are exempt in a number of articles. Here's a roundup of the coverage.
With Washington debating "sweeping" tax reform, the old credit unions vs. banks argument about the tax exemption is heating up, according to Albany, N.Y.'s CBS affiliate Monday. "If credit unions were taxed, it would basically be the end of the credit union charter as we know it," Mike Lanotte of the Credit Union Association of New York told CBS. "Credit unions' mission, to serve members who work in certain organizations or specific employers or live in certain communities, has not changed," he said.
The station also announced that the Credit Union National Association's "Don't Tax My Credit Union Tuesday" held yesterday was "being heavily promoted on social media." (See related story, Even Lawmaker Tweets: 'I Agree #DontTaxMyCU,' in today's News Now.)
The tax exemption is "absolute crucial to the financial health of credit unions," Wayne Tew, president/CEO of Las Vegas-based Clark County CU told the Las Vegas Business Press (July 22). "If taxed, the credit union's ability to grow would be severely impaired, he said.
Las Vegas credit unions said that banks' efforts were "an attempt by banks to eliminate competition and consumer choice. The tax exemption is crucial to credit unions, which by law can't raise capital through public stock offerings like banks can."
If the exemption is eliminated, who would remain to hold the banking industry accountable, Tew asked. "Let me stress that our members receive the benefits of our profits."
In the Clarion Ledger Saturday, Mississippi Credit Union Association President Charles Elliott Jr. told what would happen if credit unions lost that exemption: "We would go out of existence. There's no way we'd be able to stay in business" as credit unions, he warned.
Russell Clower Jr., a credit union member who is on long-term disability, told the Ledger his credit union typically waives service charges on depositing his checks because he can't visit local branch to do so. He has a credit card from the credit union that he might not have received otherwise, he told the Ledger.
Although Jackson-based Magnolia FCU has grown, it hasn't departed from its core mission of working with members banks won't deal with, CEO Steve Pollman said. Credit unions "don't have shareholders. We can't go out and sell stock the way a bank can to make capital improvements. The tax-exempt status allows us to be a better financial institution," he told the publication.
Banks have attacked Hope CU in Jackson for its aggressive lending, the article said. However, the numbers reflect the recession's impact on lower-income residents' ability to get accounts and service from banks, said Bill Bynum, Hope's CEO. They turned to credit unions. That highlights the continued need for tax-exempt credit unions, he said.
WEAR TV also covered the battle (July 19), noting that banks hope to "cripple the credit unions using Washington to crush the competition," and adding, "Consumers should hope that the big banks don't succeed."
Use the links to access the coverage. For more media coverage, see "News Coverage Helps Poke Holes In Banks' Attacks," in Monday's News Now.