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Credit Unions Can Influence Tax Battle Now With Member Education

Posted by Paul Gentile, Credit Union National Association (CUNA) on May 1, 2013


The discussions on tax reform continue on Capitol Hill. The status of the credit union tax exemption can’t really be defined one way or the other. That alone is cause for vigilance.

It’s not that anyone, other than the bankers, is targeting the credit union tax exemption, but on the other hand all tax preferences are on the table. The two tax-writing committees on the Hill – the Senate Finance Committee and House Ways & Means Committee – are both considering comprehensive tax reform and plan to produce proposals this summer.  In fact, as recently as April 28th, Rep. David Camp (R-MI), Chairman of the Ways & Means Committee was quoted in the Washington Post as saying “We’re not going to take the current code and see what comes out. We’re going to take a blank piece of paper and see what goes back in.” This is significant in that we would change from “protecting” our exemption to “advocating” for our exemption to be added to the new code.

There are other plans floating around on the Hill. There are no guarantees either way. It is a fluid situation that changes seemingly daily. That means we need to be ready and prepared for whatever plan surfaces.

The good news for the credit union system is we have a potential 96 million voices waiting to be heard on Capitol Hill. CUNA’s own research shows that the more credit union members understand the value of the tax exemption, the more likely they are to proactively take action to protect it. Unfortunately, our research also shows that 86% of credit union members don’t understand which taxes CU pay and which they don’t pay. Clearly, most members may not even be aware of the exemption.

Regardless of the current flux with tax reform, the credit union system would benefit from having an educated membership that understands and values the credit union structure, including the exemption. Creating a strong member baseline of the CU structure will benefit us in not only legislative battles, but on the business side as more consumers look to do business with values-based businesses. If all members knew that for every $1 of their tax exemption, $10 goes back to consumers in better rates and lower fees, it would be a lot easier to get members to advocate for the exemption and as importantly, to reinforce why they do business at a credit union.

What can credit unions do? Here at CUNA, we’d love to see credit unions get more comfortable with messaging their members about our structure. A recent CUNA survey found that more than half (52%) of board members were comfortable messaging their members (that’s up from the previous year). We’d like to see that number go to 100%. CUNA CEO Bill Cheney launched a new vision for the CU system this February: “Americans Choose Credit Unions as Their Best Financial Partner.” We feel strongly that if the system unites together and Unites for Good, we can make that vision a reality. By educating your members on the value of the credit union structure, you can play a key role in moving that vision forward.

We are making it easy. CUNA has a Tax Advocacy Toolkit (; click on “toolkit login”) that includes sample newsletter articles that credit unions can edit to their style to start telling the value story to their members. The Toolkit also includes sample advertisements, op-eds and just about anything a credit union would need to start the messaging on credit union value.

Social media is another place to tell the story. Using Twitter or Facebook to bring the message of value to members is fast and affordable. Imagine how inviting a message of value would be online in a realm where consumers are used to being messaged to make purchases. We just want to reinforce to members that they are where they need to be—at a credit union.

CUNA is aggressively monitoring the tax reform discussion on the Hill and is  actively engaged with lawmakers on the issue, but credit union members are our most powerful advocate. If credit unions can drive home the message of credit union value, we will not only be able to advocate for the exemption but for other proactive legislative issues down the line.


Paul Gentile
Paul Gentile is President and CEO of the Massachusetts, Rhode Island and New Hampshire Credit Union Leagues. He is the former President/CEO of the New Jersey Credit Union League. Prior to his role with NJCUL, Gentile served as the editor and publisher of Credit ...

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