February 26, 2014

Thaler debunks ABA 'brochure' to Congress

Feb. 26, 2014 – NAFCU Vice President of Legislative Affairs Brad Thaler emailed all members of Congress Tuesday to debunk an American Bankers Association brochure sent to lawmakers to distort the record on credit unions and their federal tax exemption.

Thaler, drawing on NAFCU's new tax study released last week, pointed to the $17 billion in benefits credit unions generate for the U.S. economy each year. He said eliminating credit unions' federal tax exemption would result in the loss of 150,000 jobs a year, a shrinking in gross domestic product and a net loss of revenue for the federal government.

Thaler said credit unions help moderate the cost of consumer financial services. "In other countries where the tax exemption has been eliminated for credit unions, the number of credit unions has declined dramatically," Thaler warned. Without credit unions, he added, consumers would likely end up paying higher fees and higher loan rates.

Credit unions grew their small-business lending during the financial downturn, he noted, while banks reduced such lending. And while banks complain credit unions don't pay corporate income tax, nearly one-third of banks also avoid such tax through their status as Subchapter S corporations.