We often talk about the credit union difference.
Credit unions were founded by and for their members. A credit union’s chief obligation is to serve the common interests of its members. Credit unions began because consumers were unable to receive the financial support they needed from banks, and credit unions continue to thrive because they put members first.
As the new administration considers tax reform options, we want to ensure changes to credit union’s tax-exempt status are off the table. Here’s how credit unions are different and make a difference for the people they serve, and how a change in credit unions’ tax-exempt status could impact you.
Credit unions are not-for-profit.
Where other financial institutions are focused on earning profits for their shareholders, credit unions return their earnings to members in the form of lower rates on loans, higher earnings on deposits and lower fees.
The calculators on our credit union home page can show you exactly what credit union membership could save you on a variety of products and services.
Credit unions are member-owned.
Because credit union members each own a share of the credit union, the members are the first priority.
Credit union members are represented by a volunteer board of directors who give their time and talents to support the institution and to ensure members’ interests are served first and foremost.
Credit unions save their members more.
Credit unions are estimated to provide $35+ billion in total consumer financial benefits annually.
And because credit unions exist, other financial institutions have to be more fair with their pricing and their service to consumers. Credit unions looking out for their members’ best interests means other financial institutions have to focus on members’ best interests as well.
Credit unions do pay taxes.
Credit unions pay payroll taxes, property taxes and more. The only tax that credit unions are exempt from is federal income tax on profits. Those taxes currently do not apply to credit unions because credit unions return their profits to members.
Credit unions prioritize educating and supporting their members.
Credit unions give back to the community financially through sponsorships, scholarships and more. They also give back through education. For example, Andrews Federal members have access to training resources to ensure they are well-equipped to manage their finances.
These types of resources are also made available to the greater community, through training programs, webinars, radio broadcasts, workshops and more. When there are challenges in a community, credit unions are among the first to step in and help - whether that’s supporting workers following the Key Bridge collapse, staying with members during severe weather, to providing financial support for those impacted by government shutdown or layoffs.
More than 140 million Americans choose credit unions as their financial partners, and these consumers are more likely to achieve their financial goals because of the savings and support they receive from their financial institutions.
Research indicates that Andrews Federal Credit Union households receive an average of $576 in financial benefits annually through their membership, and loyal members save even more (an estimated $1,289 in direct financial benefits each year). From no- and low-fee accounts and financial counseling to better interest rates on affordable loans and more, credit unions are here to help people achieve their best financial lives.
Congress recognized this commitment to members and provided credit unions with our current federal income tax status to ensure we could continue to meet the needs of our members and communities.
Taxing credit unions would not provide benefits to consumers.
Removing credit unions’ tax-exempt status would cost the federal government $33 billion in lost tax revenue, reduce GDP by $266 billion, and lose 822,000 jobs over the next 10 years.
And even more importantly, a tax on credit unions is a tax on regular, everyday people like you and me. It would reduce the credit union’s ability to provide the valuable benefits that help them save for the future, purchase homes and cars affordably, and achieve their goals.
As a credit union member, your voice matters. If you would like to express to your elected officials the value your credit union membership provides, you can visit http://donttaxmycreditunion.org. On the website, you can learn more about the benefits credit unions provide and can urge your elected officials to maintain the credit union tax exemptions and allow credit unions to continue serving communities and families like yours.