NAFCU: Tax Study Shows Credit Unions Saves Consumers $16 Billion Annually
FOR IMMEDIATE RELEASE
Washington (Jan. 23, 2017) – The National Association of Federally-Insured Credit Unions
(NAFCU) today released an independent study thatshows the benefitto U.S. consumers from the credit union federal income tax exemption is $16 billion per year, or $159 billion over the 10-year period the study examined.
NAFCU President and CEO Dan Berger lauded the study's findings as evidence of the tax exemption's crucial importance to consumers, businesses and the economy.
"This study is more proof of what we already know: The credit union industry is a vital component of the nation's economy, benefitting not only the more than 106 million credit union members but other consumers as well," said Berger. "Credit unions, as member-owned, not-for-profit institutions, are truly unique in their ability to serve members and their communities. We at NAFCU will remain vigilant in our fight to protect this industry's ability to continue that work."
Some of the key findings include:
- The total benefit to U.S. consumers from the presence of credit unions in financial markets was $159 billion over the 10 years covered by the study, or $16 billion per year.
- Removing the credit union tax exemption would cost the federal government $38 billion in lost income tax revenue over the next 10 years. GDP would be cut by $142 billion, and nearly 900,000 jobs would be lost over that period.
- Credit unions outperformed banks by offering lower interest rates on loans, higher returns on savings and deposits.
- The direct benefits to credit union members of these better loan and deposit rates were estimated to range from $4.4 billion to $6.9 billion annually for the period 2006-2015.
- Total credit union member benefits over the 2006-2015 period were estimated to be $56.7 billion.
- Bank customers benefitted from credit unions as well (due to the competition from credit unions) by an estimated $102.2 billion from 2006-2015.
The study was conducted by American University's Robert M. Feinberg and Interindustry Economic Research Fund's Douglas Meade.
The study said a conservative estimate of a $10 billion per year reduction in consumers' income – resulting from a diminished credit union role in the economy – could lead to an annual reduction in GDP of about $14.2 billion and a loss of 88,000 jobs per year over the next decade.
For more information on the study and the credit union tax exemption, go towww.nafcu.org/cutaxexemption.
The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation's federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go towww.nafcu.orgor @NAFCU on Twitter.
Director of Public Relations
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