Earlier this year the American Bankers Association launched an ad campaign across Washington, D.C., aimed at credit unions and their tax-exempt status.
The billboards read: “Today credit unions are a $1 trillion industry that pays no income tax. That’s nearly $2 BILLION every year that could help shrink the federal deficit. Now, credit unions want even more perks. It’s time to end credit unions’ indefensible and outdated special treatment. Enough is enough.”
Now CUNA is fighting back.
CUNA and its affiliated state credit union leagues are launching the campaign at a time when the U.S. House and Senate have made broad-based tax reform a major priority.
The initiative will urge lawmakers as part of any final tax reform plan to preserve the federal tax exemption credit unions receive as not-for-profit, member-owned cooperatives.
Credit unions have been exempt from paying income tax since 1916, when the income tax was first instituted, because they are, according to the IRS, “organized and operated for mutual purposes and without profit.”
“Policy is being formulated on Capitol Hill now, so we must act now. We can’t wait,” said CUNA President/CEO Bill Cheney. “It’s rare that credit unions call upon their 96 million members to take action, but our members will be the best spokespeople we have, especially on an issue as vital to our future as this.”
The campaign will emphasize that any tax on credit unions is really a tax on its members since credit unions are cooperatively owned by the people they serve. If credit unions were taxed, their benefits to members and communities will be lost, and a consumer-friendly option in the financial marketplace will vanish, CUNA said.
The “Don’t Tax My Credit Union” campaign will employ direct communication from credit unions to their members and supporters as well as Web-based and social media channels in order to convey a powerful and sustained message to Congress, CUNA said.