Setting the record straight regarding credit unions and taxes
James A. Hughes, president of Unity Bank, recently penned an Industry Insights blog for NJBIZ entitled “It’s time for credit unions to pay their fair share.”
There is a simple reason why credit unions do not pay taxes — they are member-owned, not-for-profit financial cooperatives that have numerous restrictions placed on them that banks do not. By point of example, credit unions do not have access to capital in the marketplace, which significantly restricts their growth. Credit unions have restrictions on how much they can lend to businesses, and what businesses they can lend to, while banks do not. And notably, credit unions are subject to strict regulations including stringent capital requirements and restrictions in where they can invest their members’ deposits.
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