National Association of Federally-Insured Credit Unions (NAFCU) president and CEO Dan Berger has issued a statement in response to calls to repeal the industry’s tax exemption.
This follows a letter Congress from the Independent Community Bankers of America (ICBA), which calls on lawmakers to re-examine the credit union tax exemption.
Arguing that this is outdated and unfair, ICBA CEO Rebeca Romero Rainey said credit unions have become “virtually indistinguishable” from tax-paying commercial banks. Credit unions are using their tax exemption as leverage to buy community banks, she claimed.
But NAFCU president and CEO Dan Berger said in response: “For decades, credit unions have stood as pillars in their local communities and have provided financial support to their members and Main Street small businesses when they needed it most.
“Not only does the credit union industry’s tax status provide our nation with US $16bn (£11.7bn) in annual economic benefit, the industry provides the most consumer-centric financial services in the marketplace – and has been nationally recognised for doing so.
“Eliminating the credit union tax exemption hurts everyone – American consumers, our local communities, and the national economy. Still, even in the midst of a world-wide pandemic and crisis, bankers continue to peddle anti-credit union propaganda in an attempt to undermine a separate – yet competing – industry that is focused entirely on putting people before profit.
“This fact alone should tell policymakers all they need to know about bankers’ true motives. NAFCU urges policymakers to outright reject any and all attempts to impair the good work of not-for-profit credit unions as they help their 123 million members.”
NAFCU vice president of legislative affairs Brad Thaler also responded with a message to lawmakers.
“While banking trade groups have called on Congress to change the tax status of credit unions, they fail to disclose that the banking industry received tens of billions of dollars in annual tax breaks from the Tax Cuts and Jobs Act,” he wrote.
“They also fail to point out that nearly one-third of all banks are Subchapter S corporations and do not pay corporate income taxes themselves. These annual tax breaks for banks far outpace the annual tax expenditure of the credit union tax exemption. They also do not take into account how the credit union tax status benefits the economy at large.”