OKLAHOMA CITY, Okla. (4/10/13)--The financial services industry seems to be the only industry where profit-driven companies target their not-for-profit competitors, Matthew Stratton, vice president of marketing for Tinker FCU, told The Oklahoman in an April 9 article.
In fact, bank attacks against credit unions' not-for-profit tax status is like for-profit health clubs criticizing the YMCA's nonprofit status, Stratton said. The $2.9 billion credit union is based in Oklahoma City and, like all credit unions, is a member-owned, not-for-profit financial cooperative. That unique structure is at the root of credit unions' federal tax exemption.
The Oklahoma Bankers Association is targeting the tax status of Tinker FCU and all other state credit unions.
Preserving the credit union tax status is the Credit Union National Association's top legislative priority, and CUNA has emphasized that credit unions must work collaboratively to communicate the importance of that status to policy makers and to their members.
Credit unions use income to pay dividends and offer loans and products at better rates to members, while a bank's profits go to increase the wealth of its shareholders, said Gary Jones, president of the Credit Union Association of Oklahoma, who also was quoted in the article. And, as Stratton pointed out, credit union members pay taxes on dividends they receive from a credit union.
Many Oklahoma banks are organized as S corporations, a status that allows them to avoid paying federal income taxes at the corporate level, Jones also noted.