Posted May 14th, 2013 No Comments
Educating Members on CU Tax Status

by Scott Sullivan, President/CEO

As Congress works on tax reform, it is imperative that credit unions educate their members that credit unions have been federally tax exempt since 1937.  Congress provided the exemption because all credit unions are not-for-profit financial institutions that are owned by their members for the benefit of all members.  As not-for-profit financial institutions, credit unions return their earnings to their members in the form of lower rates on loans, higher returns on savings and lower and/or fewer fees. 

We cannot assume that all members know that their credit union is federally tax exempt nor why Congress provided the tax benefit to credit unions in the first place.  It is said that credit union members love their credit union and I believe that to be true.  Members love credit unions because credit unions exist solely to serve the members.  The unique structure and philosophy of credit unions are the foundation to what credit unions are and how they serve their members.  The tax status does not make us who we are but it does help us to serve those who are not being served by for-profit banks.  I have heard countless stories over the years from credit union members who tell me, was it not for the credit union, they would not have gotten the loan they needed.  We need to ensure that those same members know credit unions are federally tax exempt and that our tax exemption helps credit unions to better serve their members.

I would encourage all credit unions to make every effort possible to better educate their members on this important topic so that their members understand why Congress has provided credit unions with a federal tax exemption and how that designation benefits them as members.  Including an article in your credit union newsletter, inserting statement stuffers, or directing them to aSmarterChoice.org can go a long way in helping to educate members on this topic.  If you would like a sample article, please don’t hesitate to contact me at 402-333-9331 ext. 202 or by e-mail at brandon@nebrcul.org

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