Many good reasons for credit unions’ tax exemption

first_img 10SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr Credit unions are not-for-profit cooperatives, serve defined fields of membership and cannot issue capital stock.Regarding Alex Sanchez’s “A Trillion-Dollar Tax-Exempt Cash Cow”(op-ed, May 18): Since passage of the 1934 Federal Credit Union Act, the things that distinguish credit unions from for-profit financial institutions have not changed. Credit unions are not-for-profit cooperatives, serve defined fields of membership and cannot issue capital stock. They return earnings they receive to members through higher dividends and lower rates and fees.Credit unions have grown to more than $1 trillion in assets—and attracted more than 100 million consumer-members—not because of any tax advantage, but because they deliver services their members want at low, reasonable cost. Moreover, they act as a check on other institutions’ rates and fees and help the economy grow.Credit unions do pay taxes, including payroll taxes and many state and local taxes. Their member-owners pay personal income taxes on dividends from their credit unions. But nearly one-third of banks—those with the federal government’s “Subchapter S” status—pay no federal corporate income tax. continue reading »last_img

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