Tuesday, October 1, 2013

Lake Michigan -- Poster Child for Why CUs Should Pay Taxes

Lake Michigan Credit Union in Grand Rapids, Michigan is a perfect poster child for abolishing the credit union's tax exemption.

The credit union has $2.9 billion in assets at the end of the second quarter 2013.

It reported a profit of $78.3 million for 2012. Its return on assets was 3.04 percent.

Lake Michigan Credit Union operates a used car auto center. What does a car dealership have to do with its exempt purpose?

Now, this highly profitable credit union is advertising anyone can open an account.

at

6 comments:

  1. AnonymousOctober 4, 2013 at 1:50 PM

    Congratulations to Lake Michigan for their excellent financial performance! Keith, credit unions have owned used car lots for decades. I used to have to audit them. I think it's a terrible investment, but if they can afford it, then why not? "People of modest means" need cars to drive to work and take their kids to school too, you know.

    ReplyDelete
    Replies
    1. AnonymousOctober 5, 2013 at 12:14 PM

      Thats all fine.
      Tax them

      Delete
    2. AnonymousOctober 7, 2013 at 1:51 PM

      The used car lot CUSO is a taxable entity.

      Delete
    3. AnonymousOctober 8, 2013 at 6:09 PM

      Yes the cusp is a taxable entity which credit unions downstream expenses to so that the cuso pays less or no taxes.
      These large credit unions are no different than banks and attempt/ or achieve business with the same consumers the banks do.
      The large credit unions should get the same regulations on capital, unlimited access to customers, the same business lending potential as banks and access to equity capital...and they should pay federal tax on income.
      No brainier.
      Bigger things to worry about.
      Just do it.
      Too much time money and effort wasted on trade association agenda.

      Delete
    4. AnonymousOctober 9, 2013 at 12:39 PM

      They probably downstream expenses just like any company to minimize taxes. Remember what the U.S. Supreme Court opined on the Citizens United case: Corporations are people too.

      I wonder where you draw the line on which credit unions should be taxed. Our C.U. is considered large but runs like a classic credit unions--restricted FOM, no CUSOs, just trying to do what's right for the membership. Should we be taxed solely because we're large in someone's eyes?

      Delete
    5. AnonymousOctober 10, 2013 at 12:30 AM

      Just love cu logic. "They downstream like every other company..." Ceptin' heres the part you'ns always leave out..."cept we dont pay taxes".
      Cant blame us. Its worked so far. We look just like community banks but dont pay taxes.
      Lets ride this train til congress wakes up!
      Never.

      Delete