Comparing the NFL tax status to that of credit unions is essentially comparing a lobster roll to a Maid-Rite [“As NFL drops nonprofit status, lawmakers punt,” May 5].
As a former member of Congress, I know credit unions work on behalf of Iowans. Congress has reaffirmed the credit union federal tax status several times because they’re member-owned, democratically operated, not-for-profit cooperatives, managed by volunteer boards of directors, with a specified mission of promoting thrift and providing access to credit for everyday needs.
This tax status benefits all consumers — credit union members and nonmembers alike — to the tune of $10 billion a year nationally. To say credit unions are “of questionable public benefit” is a grossly misinformed statement.
Further, tax policy consistently recognizes that the health of small, locally controlled businesses are vital to the country’s economic health. The credit union tax status furthers this goal in a manner that is substantially similar to the preferential tax treatment enjoyed by Subchapter S banks. There are more than 2,200 Subchapter S banking institutions in the U.S., and nearly 200 in Iowa alone, which jointly account for $510 billion in assets. While it’s true that bank Subchapter S election is not the same as a tax exemption [“Credit unions aren’t taxed like other cooperatives,” May 14], the lost revenue was nearly $1 billion in 2014 and $12 billion since 1997.
I strongly believe there’s room in the market for both credit unions and banks, and that both serve a purpose. What makes credit unions different is that they aren’t turning a profit to fatten the pockets of Wall Street like the banks do — they’re returning earnings to their members through better rates and lower fees. Bottom line: the more competition in the market, the better for consumers.
When it comes to taxes, 1,065,749 Iowa credit union members already paid roughly $13.2 billion in state and federal income taxes in 2014. An additional tax on credit unions would be a one-two punch: a new tax on middle class families and less banking competition. Talk about a questionable public benefit. Me, I’ll stick with the Maid-Rite.
JIM NUSSLE is the president and CEO of the Credit Union National Association. He is a former director of the Office of Management and Budget and an eight-term congressman from Iowa. Contact: firstname.lastname@example.org
Original Des Moines Register article: http://www.desmoinesregister.com/story/opinion/columnists/iowa-view/2015/06/02/credit-unions-benefit-iowa/28339237/