KANSAS CITY, Mo. (1/22/14)--Dennis Pierce, CEO of Lenexa, Kan.-based CommunityAmerica CU, noted the historical significance of 2014 and credit unions' creation in a Monday op-ed in The Kansas City Star.
This year marks the 80th anniversary of the Federal Credit Union Act, in which "Congress created credit unions in response to the stress on family pocketbooks in the depths of the Depression," he wrote. In order to make family money management economical, lawmakers included an institutional tax exemption because "credit unions are mutual or cooperative organizations operated entirely by and for their members."
Pierce said, "Today, Congress is hearing special interest suggestions to remove this exemption, despite the festering recession. Doing so would create a new tax burden on the nation's 96 million credit union members, the vast majority of whom are middle- and lower-income individuals struggling to make ends meet."
He dispelled the myth that credit unions don't pay taxes, listing the types they do pay--property, tangible personal property, employee payroll, unrelated business income, sales, and state franchise.
Pierce cited research that removing the tax exemption would remove $6.3 million in consumer spending in Kansas alone, with similar results expected in Missouri.
"Though most agree our federal tax system needs work, taxing the one financial institution system serving 96 million Americans is not the way to do it," Pierce wrote, adding, "Congress today should remember the wisdom of its 1934 class of predecessors and ensure that the credit union tax exemption is sustained for the benefit of American consumers."
Pierce, who leads the $1.8 billion-asset credit union, also is the incoming chair of the board of directors for the Credit Union National Association.