Berger sets record straight on credit unions’ tax exemption
NAFCU President and CEO Dan Berger, in an op-ed published by American Banker Wednesday, urged the banking industry to stop trying to undermine credit unions and instead focus on serving their customers. He also outlined the value of credit unions to the nation’s economy.
Responding to a recent op-ed from the president and CEO of the Florida Bankers Association (“Credit union loophole should be first casualty in tax reform,” Jan. 21), Berger said the banking industry’s focus on credit unions’ tax status is “ironic” given that roughly one-third of banks have “Subchapter S” status and pay no federal corporate income tax. He also pointed out that credit unions do pay taxes, including payroll and other state and local taxes.
Berger also noted the regulatory and statutory differences between credit unions and other types of financial institutions. For example, credit unions serve defined fields of membership and are not permitted to issue capital stock.
He cited NAFCU’s independent tax study, which showed the benefit to U.S. consumers from credit unions’ tax exemption at $16 billion per year, or $159 billion over the 10-year period examined. “Furthermore, a 50% reduction in market share for credit unions would cost bank customers an estimated $6.9 billion to $15.7 billion per year in higher loan rates and lower deposit rates,” he added.
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