Credit unions don’t pay federal income tax because we are not-for-profit financial cooperatives.
WSJ Letter to the Editor
“Credit-Union Regulator Toughens Member Rule” (Money & Investing, May 1) again shares with us the sophisticated ruse that is used by our banking brethren to perpetuate the idea that credit unions should be taxed. Credit unions don’t pay federal income tax because we are not-for-profit financial cooperatives. That’s it. Yes, we have common bonds, but that doesn’t dictate why our tax position is such.
Credit unions choose to be not-for-profit cooperatives and offer lower rates to provide corporate shared value and social responsibility to our members and the communities we serve. The article’s intimation that credit unions shouldn’t be allowed to keep their tax exemption because it enables us to offer better interest rates is a well-sung hymn from the American Bankers Association hymnal. It is yet another not-well-disguised attempt at eliminating competition to improve bank profits. If what credit unions have is such a competitive advantage, I invite all banks to change their charters to those of credit unions to avoid federal tax.
Patrick K. Adams
CEO
St. Louis Community
Credit Union
St. Louis
Original letter here (subscribers only)