This past month, four members and 15 staffers from the U.S. House Ways and Means Committee hosted a briefing on the credit union tax status. CUNA President/CEO Bill Cheney underscored that Congress conveyed an exemption from federal income tax to state and federal chartered CUs because of their ownership structure and special mission. The CU tax exemption has been reaffirmed several times by Congress, including in 1935, 1936, 1937, 1951 and 1998.
One of the core reasons for the continued tax exemption is credit unions’ not-for-profit cooperative structure. Today, nearly 96 million credit union members benefit from lower rates on loans, lower fees on services, and higher returns on deposits. Non-members also benefit because the focus on service by CUs keeps competitive pressure on banks. In summary, CUNA noted the economic benefits from the CU tax exemption far outweigh any funds that would be brought in by imposing a federal income tax on credit unions.
With a Joint Committee on Taxation estimate of $500 million in unclaimed government revenues in 2012 from the CU tax exemption, CUNA estimates CUs gave $8 billion back to their members in the form of low fees, low rates and other benefits. MCUL and Michigan CU leaders discussed the CU tax exemption earlier this spring with House Ways and Means Committee chairman Dave Camp, R-Midland, during our annual GAC fly-in. MCUL government affairs staff continues to communicate on a regular basis with Rep. Camp’s office and his staff on the importance of our exemption. Additionally, a representative from Rep. Camp’s office is confirmed to participate in the Mid-Michigan Chapter’s upcoming legislative breakfast on May 6 in Saginaw. Click here to access the MCUL’s issue brief on the CU tax exemption. Click here to access Chairman Camp’s Ways and Means Committee webpage.