Study: CU tax exemption is critical for soundness of economy, saves consumers $15B a year
An independent study commissioned by NAFCU released today examines the benefits brought to consumers, businesses and the U.S. economy by the credit union federal income tax exemption. Specifically, the study found that removing the tax exemption status for credit unions would reduce tax revenue by $56 billion and reduce economic activity by $120 billion over the next decade, while eliminating nearly 80,000 jobs per year that span.
NAFCU President and CEO Dan Berger lauded the study's findings as evidence of the tax exemption's crucial importance to the American economy.
“As not-for-profit cooperative financial institutions, credit unions have always put their members first by providing them with the best financial products, rates, and lower fees,” said Berger. “Today, 125 million consumers are members of a credit union. Consumers continue to recognize the benefits of credit unions and how a credit union can help them achieve financial freedom. The tax exemption status provided to credit unions has yielded dividends to consumers, Main Street businesses, and the U.S. economy through lower fees, better financial products, and better rates.”
The study was conducted by American University's Robert M. Feinberg and Interindustry Economic Research Fund's Douglas Meade.
In their report, the authors noted the ways bank customers benefit from the role credit unions play in the marketplace. "The benefit of those better rate offerings extends beyond credit union members to bank customers as well, due to increased competition," they wrote. " The study found a 50 percent reduction in the credit union market share would cost bank customers an estimated $6.8 billion to $9.9 billion per year in higher loan rates and lower deposit rates. The total losses to bank customers under such a scenario totaled $80.7 billion over the ten-year period examined.
The study also found that the credit union tax exemption benefits all households – including both members and non-members – to the tune of $15 billion a year. Of note, direct benefits to credit union members from these lower rates range from $4.4 to $10.7 billion annually over the past ten years.
"These results match the findings from previous studies of the impact of eliminating the credit union tax exemption in Canada and Australia, where the number of credit unions was severely reduced following taxation," they continued. "Reduced competition for consumer financial services led to higher interest rates on consumer loans and lower interest rates on deposits in both countries."
Strategy, FinTech, Web/Tech, Technology, Cloud Computing
Add to Calendar 2021-09-23 14:00:00 2021-09-23 14:00:00 IRA Update Whether you’re new to IRAs or just need a refresher, it’s important to stay on top of the latest IRA-related regulatory changes and legislative developments. Following a high-level review of IRAs, we’ll discuss the latest IRA guidance and how it may affect your IRA program, documents and procedures. We’ll also review the IRA establishment, SEP plan, and recent tax law changes. Key Takeaways Latest IRA rules and regulations Discuss how recent changes may affect your IRA program Recent tax law changes Walk through SEP plan Register Now$295 Members | $395 Nonmembers (Additional $50 for CD)One registration gives your entire team access to the live webinar and on-demand recording until September 23, 2022.Go to the Online Training Center to access the webinar after purchase » Who Should Attend? Chief Executive Officers Chief Financial Officers Education Credits CPA credit information is below; recommended 1.0 CPE credits. CPA Certification Credit Information Reviewer: Josie Collins, Associate Director of Education, NAFCU Learning Objectives: See key takeaways Program Level: Basic Prerequisites Needed: None Advance Preparation Needed: None Delivery Method: Group Internet-Based Recommended CPE Credits: 1.0 credits Recommended Field of Study: Business Law – Technical About Our Webinars Our webinars are streamed live from NAFCU headquarters near Washington, D.C. Your audio/video feed of the presenters includes presentation slides and downloadable handouts. You can easily submit your questions to the presenters at any time during the live broadcast, with no dialing over the phone! The audio and video stream directly through your computer. Web NAFCU firstname.lastname@example.org America/New_York public
Get daily updates.
Subscribe to NAFCU today.