By Jim Nussle Frank Keating really fumbled his assessment of how credit unions work (After the NFL Decision, It's Time for Credit Unions to Stop Abusing the Tax Code , Roll Call, May 8) – but it’s par for the course with the bankers. The fact of the matter is Congress provided credit unions a federal tax-exemption because of their not-for-profit, member-owned cooperative structure. This structure allows credit unions to have a real impact on the financial lives of consumers.
The credit union tax status benefits all consumers – credit union members and nonmembers alike – to the tune of $10 billion a year nationally because credit unions are fulfilling their special mission to serve Americans.
Credit unions take that mission seriously. That’s one of the reasons not-for-profit financial institutions approve 64 percent of mortgage applications from low and moderate income borrowers and that 49 percent of credit union branches are located in Community Development Financial Institution investment areas.
Credit unions aren’t turning a profit to fatten the pockets of Wall Street banks – they’re returning earnings to their members in the form of better rates and lower fees. These local institutions provide more competition in the financial market, driving down the banking costs for consumers.
102 million credit union members already paid a total of $1.2 trillion in state and federal income taxes in 2014. An additional tax on credit unions would be raising taxes on middle class families while reducing banking competition. Keating and his banking buddies really need to reexamine the facts of the credit unions structure. There’s a flag on every play they try to run on the credit union tax status.
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 a former eight-term Republican congressman from Iowa. The 114th: CQ Roll Call's Guide to the New Congress Get breaking news alerts and more from Roll Call in your inbox or on your iPhone.