As Congress looks at reforming the U.S. tax code, credit union groups are arguing that the elimination of the credit union tax exemption would cause a dramatic decline in the number of credit unions.
For example, in a July 17 letter to Senators Hatch (R - UT) and Wyden (D - OR), Carrie Hunt, EVP for the National Association for Federally-Insured Credit Unions (NAFCU), wrote: "Simply put, the tax exemption is an issue of survival for credit unions."
Hunt further wrote that "[i]f the tax exemption was removed, many would convert to banks or just go away."
Heaven forbid that a credit union converts to a bank.
It is a sad commentary that credit unions cannot survive without a federal subsidy.
I believe NAFCU is over-stating the impact of taxation on the credit union industry.
If you think limited powers and full taxation is the answer, please review the S&L debacle that cost the American taxpayers in excess of $350 billion.
ReplyDeletePersonally, I believe that powers should be harmonized between banks and credit unions once credit unions are taxed.
DeleteThe larger credit unions in the industry would have no issues surviving taxation, but for the majority of credit unions who are smaller in nature, this would put them out of business, leading to mergers and, ultimately, a few larger credit unions left. I'm guessing that is where NAFCU and Carrie Hunt is going with that comment. For better or for worse, the industry would forever be changed if credit unions were taxed.
ReplyDeleteForever changed?
DeleteSo what?
And small credit union aren't profitable so they'd pay no taxes anyway, many of them.
Big credit unions can handle being taxed and with full powers and with a real regulator.
Carries problem is HER job is at risk, as with nussle, Berger, etc.
And who cares?
I guess I just have a more opportunistic outlook on the future than you do. I'm sorry you have such a sad outlook on the world around you.
DeleteSince larger CUs look and act more like banks and banks are taxed and not failing because of tax, so what if CUs are taxed?
ReplyDelete