Coburn ‘Wrong, Uniformed’ about credit union tax status
Credit union leader Nussle: It’s based on structure, differences from banks
WASHINGTON, DC (December 9, 2014) — In response to Sen. Tom Coburn’s (R-Okla.) “Tax Decoder” released today – which essentially calls for imposing new, unjustified taxes on credit unions by changing their tax status – Credit Union National Assn. (CUNA) President and CEO Jim Nussle issued the following statement:
Sen. Coburn has had a distinguished career in the Senate, but I have to take issue with his view of the credit union tax status: He’s just wrong and uninformed. Our tax status is based on the structure of credit unions – as not-for-profit, member-owned, volunteer-led financial institutions. It is not based on the products or services a credit union offers. Sen. Coburn’s report also reveals little understanding of how credit unions differ from banks. At a bank, the beneficiaries of the bank’s services are the shareholders – who expect as much profit as possible be returned to them from bank customers. At a credit union, the member-owners are the beneficiaries. Because of the cooperative ownership structure, any excess earnings of a credit union are redirected back to members in the form of lower loan interest rates and higher savings yields. And credit unions deliver. CUNA’s research shows credit union members in the year ended June 2014 realized financial benefits of nearly $6 billion, just by saving at, borrowing from or acquiring other financial services from their credit unions, rather than from a bank. Further, the competitive pressure credit unions place on the financial services marketplace, for lower loan rates and higher savings return, benefits all consumers. Finally, members appreciate what the credit union difference means to them: This year, for the seventh year in a row, credit unions were tops in “customer satisfaction” among financial institutions, beating out the banks. Members/consumers get it about credit unions – and that’s what really counts.