Credit Union difference blindsides bankers
by: Jim Nussle
Frank Keating really fumbled his assessment of how credit unions work (After the NFL Decision, It’s Time for Credit Unions to Stop Abusing the Tax Code, Roll Call, May 8) – but it’s par for the course with the bankers. The fact of the matter is Congress provided credit unions a federal tax-exemption because of their not-for-profit, member-owned cooperative structure. This structure allows credit unions to have a real impact on the financial lives of consumers.
The credit union tax status benefits all consumers – credit union members and nonmembers alike – to the tune of $10 billion a year nationally because credit unions are fulfilling their special mission to serve Americans.
Credit unions take that mission seriously. That’s one of the reasons not-for-profit financial institutions approve 64 percent of mortgage applications from low and moderate income borrowers and that 49 percent of credit union branches are located in Community Development Financial Institution investment areas.
Credit unions aren’t turning a profit to fatten the pockets of Wall Street banks – they’re returning earnings to their members in the form of better rates and lower fees. These local institutions provide more competition in the financial market, driving down the banking costs for consumers.
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