June 24, 2014

NAFCU rebuts banking trade on CU tax exemption in The Hill

June 25, 2014 – NAFCU President and CEO Dan Berger rebutted a June 23 editorial in The Hill from the American Bankers Association by setting the record straight on the credit union business model and touting the industry's benefit to all Americans.

"Credit unions exist to serve all of their members," Berger wrote in his response, published today in The Hill. "While credit union membership has certainly grown since the passage of the Federal Credit Union Act in 1934, the credit union business model today is the same as it was then. Credit unions aren't in business for profit. They are run by their members, for their members …"

Berger also highlighted NAFCU's recent independent tax study that shows all Americans would lose an annual $17 billion in economic benefits if the credit union federal income tax exemption were eliminated. The study also revealed that the repeal of the credit union tax exemption would cost the federal government $15 billion in lost tax revenue, $148 billion in gross domestic product and would result in the loss of 1.5 million jobs over the next 10 years.

Berger noted the competition credit unions create in the financial sector by providing a check on banks' rates and fees. "In fact, the exemption results in more than $10 billion in economic benefits annually for all Americans," he wrote. He added, "If the bankers want the advantages of being a credit union, they should convert, not try to destroy a proven, valued business model."