NWCUA’s Stang States Case for Credit Union Tax Exemption
January 29, 2013
January 29, 2013
Banks are again working to undermine the credit union tax exemption, but according to an op-ed published by Northwest Credit Union Association (NWCUA) President and CEO Troy Stang in The Oregonian last Friday, repealing the tax exemption would cost Oregon consumers millions while netting “very little in state revenue.”
The article bears the headline, “Building on shared benefits, mission-driven credit unions are consumers’ choice,” and outlines the benefits of the cooperative structure and how it serves as the basis for credit unions’ tax status. It was printed nine days after another opinion piece in The Oregonian—one citing a report funded by the Oregon Bankers’ Association—attempted to paint larger credit unions as “bank-like” and argued that they should be taxed as such.
“As a not-for-profit institution, owned by members, the cooperative model of shared benefits stands in stark contrast to the stockholder-focused banks and the constant drive to increase profits through higher fees and loan rates,” Stang wrote.
Stang goes on to address specific concerns raised in the report, including criticism of credit union mergers and consolidation.
“The conclusion that is drawn suggests credit unions should be taxed like for-profit banks, while omitting the fact that credit unions do pay property and payroll taxes and members pay income taxes on the earnings they receive,” he wrote. “Without a not-for-profit alternative for consumers, there would be little incentive for banks to restrain their ever-increasing drive to grow income through escalating fees. This would impose direct harm on consumers and businesses during a time of economic difficulty.”
The timing of the banks’ message coincides with the introduction of three bank-supported bills in the Oregon Legislature that would do away with credit unions’ tax exemption and would require credit unions to document and prove community outreach and investment efforts.
“Credit unions demonstrate their community commitment every day. Whether it is the millions of dollars donated to local children’s hospitals, building homes for disabled veterans or volunteers giving hundreds of hours teaching consumer finance in schools and neighborhood centers, credit unions serve their communities every day,” Stang wrote. “If banks truly believed that the larger credit unions held a competitive advantage in the marketplace, they could switch to a credit union charter themselves — and none of them has chosen to do so.”
Protecting the credit union tax-exemption is the NWCUA’s top legislative priority in 2013, and the Credit Union National Association has indicated that it will be the No. 1 issue at its Governmental Affairs Conference Feb. 24-28 in Washington, D.C.
Read Stang’s full article here.
Questions? Contact a member of the Association’s Legislative Affairs team: