Removing Barriers Blog

CUNA’s Chief Advocacy Officer Writes to Congress About the Credit Union Tax Status
Posted April 05, 2019 by CUNA Advocacy

Earlier this week, CUNA’s Chief Advocacy Officer – Ryan Donovan, wrote to Congressional offices highlighting the numerous public benefits that come with the credit union tax status. The credit union tax status is one of the best investments the government makes in its citizens.

The email dispels numerous myths about the credit union tax status and points out that the status is based on credit unions’ mission and structure, which remains unchanged from the earliest days of not-for-profit financial cooperatives in America.

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Dear Credit union colleague,
 
Credit unions are not-for-profit financial cooperatives that serve the needs of their members – your constituents – by delivering direct benefits in the form of higher savings returns, lower loan rates and fewer fees.    
  
Like banks, credit unions are insured and regulated. But unlike banks, they don’t exist to make money for their shareholders. Rather, credit unions exist to provide their members with safe and affordable financial services.     
  
All credit unions are driven by the same mission and structure, regardless of the size of the credit union or the services they provide. 
CUNA GAC Statistics
 
Given the very different organization and incentive structures between credit unions and banks it makes sense that they wouldn’t be subject to the same rules and regulations. But banks don’t see it this way. At least not when it comes to taxes.   
  
Credit unions do not pay federal income taxes because they are not-for-profit. They do pay other federal, state and local taxes.   
  
Taxing credit unions would yield enough money to run the government for about 4 hours. That’s not a lot of money when you compare it to the nearly $30 billion tax break banks got in 2018 alone from the Tax Cuts and Jobs Act.  
  
Credit unions are a driving force in the national economy, contributing to communities in every state by helping one member at a time. Whether it’s the starter home for newlyweds, small business loan in a regenerating neighborhood or line of credit when that rainy-day hits, credit unions provide more affordable services without the risks and profit incentives that come with banks. 
 
The credit union tax status is one of the best investments that the government makes in its citizens. Every day credit unions earn it by working hard to serve their members and fulfill the mission Congress has given them. 
 
Ryan Donovan
Chief Advocacy Officer
Credit Union National Association