WASHINGTON (5/8/14)--In light of increasing attacks on the credit union tax status, the Credit Union National Association developed a new radio advertisement designed to show the credit union difference when it comes to member benefits.
The new 30-second ad, which is intended to be used as a resource, reminds current and potential credit union members that "credit union services are based on members' needs, not profit margins."
"Highlighting the ways credit unions serve their members is a key part of our advocacy efforts," said Richard Gose, CUNA senior vice president of political affairs. "And a critical part of those efforts is incorporating that message into our ads."
As not-for-profit, member-owned financial institutions, credit union earnings are returned to members through services such as surcharge-free ATMs, better rates and lower fees. With banks, those earnings go to outside bond and stockholders through dividends.
While credit unions pay state, payroll and sales taxes, they are exempt from federal income taxes. This was established in 1937, and upheld in 1951 and 1998, through the Credit Union Membership Access Act.
"Credit unions, unlike many other participants in the financial services market, are exempt from Federal and most State taxes because credit unions are member-owned, democratically operated, not-for-profit organizations generally managed by volunteer boards of directors and because they have the specified mission of meeting the credit and savings needs of consumers, especially persons of modest means," reads the act.
The tax status of credit unions has come under attack
in several states, including New Hampshire, Maine, Connecticut, Vermont, South Dakota and Nebraska.
On April 15, the New Hampshire Bankers Association announced a resolution in which they urged Congress to repeal the federal tax exemption for credit unions, accusing credit unions of failing to work for underserved populations. The New Hampshire Credit Union League has repeatedly refuted those claims.
CUNA's award-winning grassroots advocacy campaign #DontTaxMyCU encourages credit unions to contact state and federal lawmakers with the unified message of "Don't Tax My Credit Union." In February, more than 5.3 million users of Twitter and Facebook were exposed to the hashtag #DontTaxMyCU. CUNA and state leagues spearheaded two similar events in July and September 2013.