The CU Journal Asked: 'Are You Surprised To See The CU Tax Exemption Coming Under Fire And Is The Tax Exemption Still Deserved?'
As a single-sponsor CU that has not strayed from its roots, it's all about service to members. Credit unions definitely still deserve their tax exemption."
-Tony Mook, CEO, WestStar Credit Union, Las Vegas
No, I'm not surprised. We are a small credit union, not a community charter. I think that taxation will eventually happen because credit unions are doing a lot of things that make us look like banks.
Yes, I believe credit unions are still deserving of the tax exemption. Small credit unions still have their members in mind. I believe we make loans to members who couldn't get loans elsewhere or would get them at much higher rates if it weren't for us.
-Jane Foster, CEO of Lynchburg Municipal Employees FCU, Lynchburg, Va.
We sent an e-mail encouraging our staff to go to the website and follow the steps to send a message to their Congressman. Last week, (CEO) Jim McPheters sent e-mails to various representatives about the hearing.
We held an all-staff meeting in the middle of October to discuss the latest banker attacks. This helps later when we ask them to do something. It is important to have the staff involved in grassroots efforts.
Absolutely, credit unions deserve their tax exemption, whether they are large or small. There is some thought out there that credit unions with large community charters that have many of the same services banks offer such as business services are different. Still, all credit unions are set up philosophically exclusively to serve members, especially members of modest means, and we are not for profit.
I don't understand why banks are so greedy. They have made record profits for several years in a row, and we only have 6% market share, yet they still attack us. Credit unions are an impediment to them making even more profits because they have to charge slightly lower fees than they want to.
-Renee McKee, vice president of marketing, California Coast CU, San Diego
We just returned from a day of Hill visits in advance of the (House Ways & Means hearing. We met with the California Congressmen who are on the Ways and Means Committee.
We outlined how consumers benefit from being credit union members. They get better rates on auto loans, on home loans, on all the services credit unions provide. Credit unions take their tax exemption and turn it into a benefit for all consumers. We cited research that showed a $6.3 billion benefit to credit unions members, plus a $4.3 billion benefit to bank customers due to credit union competition.
We were very well received. They listened to our story and heard us out. I felt there was a general level of support on the tax exemption status, and some uncertainty why this hearing was called.
-Ryan Donovan, the California CU League's director of the Washington office
The recent tax exemption debate was the result of legislators looking at budget cuts and the determined efforts of the banking industry. The CU industry needs to nail down the definition of moderate means before Congress does it for us. We can do that by proving our status in the community.
Credit unions need to define ourselves, document it and offer more reportability to offset bankers' claims. Credit unions still have 6% of the market while banks are reporting record profits. The real pinch for small banks has come from the huge profit run of large banks and not the credit union industry. If we have it so much better why not change to a non profit? We still deserve the tax-exempt status.
-Jimmy B. Smith, president Singing River FCU, Singing River, Miss.