Don’t Tax My Credit Union Information
Don’t Tax My Credit Union
The “Don’t Tax My Credit Union” movement has gained momentum in Congress, as legislators consider revising the tax-exempt status that credit unions have held for over a century. This initiative has sparked a significant debate between credit unions and banks, each presenting compelling arguments regarding the potential impact of such a policy change.
Background: The Credit Union Tax Exemption
Credit unions, established as not-for-profit financial cooperatives, have been exempt from federal income taxes since their inception. This exemption allows them to return profits to members in the form of favorable loan rates, lower fees, and higher savings yields. The original intent was to provide financial services to individuals of modest means, distinguishing them from for-profit banks.
The Credit Union Perspective: Upholding the Exemption
Credit unions contend that their tax-exempt status is vital for maintaining their unique role in the financial ecosystem. They argue that eliminating this exemption would lead to higher costs for members and reduce their ability to offer competitive rates. Furthermore, credit unions highlight their commitment to community reinvestment, pointing out that they invest heavily in local initiatives, including affordable housing and small business loans.
The Threat of Taxation: What’s at Stake?
Recently, the Independent Community Bankers of America (ICBA) has called for an end to the tax exemption for credit unions with assets over $1 billion, arguing that large credit unions now operate in much the same way as for-profit banks. While we understand the concerns about competition, we believe that these larger credit unions, including Freedom Credit Union, still prioritize serving their members in ways that banks simply cannot. We remain committed to supporting communities, offering low-cost financial services, and keeping our focus on the needs of our members rather than shareholder profits.
Taxing credit unions could open the door for further financial pressures, especially on smaller credit unions, and could erode the ability of many institutions to continue offering the low-cost financial products our members depend on. It could also lead to fewer local decisions being made by organizations that know and care about their communities.
What Credit Union Members Can Do: Your Voice Matters
As a part owner of Freedom Credit Union, your voice plays a crucial role in influencing the legislative process. If you want to help protect the tax-exempt status of credit unions and ensure that we continue to serve your financial needs, here’s what you can do:
- Contact Your Representatives: Reach out to your congressional representatives and let them know how important it is to maintain the tax-exempt status for credit unions. Explain how our cooperative model benefits you personally—whether it’s through lower loan rates, higher savings yields, or better customer service.
- Take Action Now! Click here to contact your representatives and tell that that eliminating the credit union federal income tax status would hurt the people they were elected to serve!
- Spread the Word: Talk to your friends, family, and colleagues about the importance of the credit union tax exemption. The more people who understand the potential consequences of changing the tax laws, the more effective our collective voice will be.
