America’s Credit Unions, Luminate: Millions of Americans would suffer from a new tax on credit unions
“Banking groups argue that credit unions are just like banks and the not-for-profit tax status is an unfair advantage. Yes, credit unions offer financial services, but the reality is that credit unions’ cooperative model produces significant pro-social outcomes that aren’t found anywhere else in the financial sector.”
In a Fortune magazine op-ed published Tuesday, America’s Credit Unions President/CEO Jim Nussle and Luminate – Louisiana’s Credit Unions President/CEO and National Cooperative Business Association (NCBA) Board Member Juan Fernández Ceballos made the case against the banking industry’s push to put a new tax on credit unions.
They challenged the banking industries’ false claims that the credit union tax status grants credit unions an unfair advantage:
“Banks are thriving despite credit unions’ presence in the market: Banks have a near-monopoly presence, with a 91.2% market share of total financial institution assets, compared to credit unions’ 8.8% share. Not to mention, the tax cuts banks received from the 2017 Tax Cuts and Jobs Act costs the government 12 times more than the credit union tax status,” the two wrote.
They reminded readers about the impact of credit unions during economic disaster, writing that:
“Credit unions have stepped up in times of economic distress, from helping families recover from the Great Recession (when 7.3% of bank mortgages were delinquent against 2% of credit unions, when 331 banks failed against credit unions’ 64, and when 710 banks received more than $236 billion in public assistance, compared to 48 credit unions receiving $69 million) to supporting small businesses through the COVID-19 pandemic.”
Nussle and Fernández Ceballos explained that credit unions keep American communities afloat and emphasize to legislators the massive negative impact a new tax on credit unions would bring.
“[Credit unions] serve as lifelines in underserved areas where traditional banks have retreated, ensuring that financial inclusion remains a reality, rather than a policy objective,” they wrote. “Legislators have a choice: support policies that strengthen financial inclusion or impose unnecessary tax burdens that will hurt millions of Americans if credit unions are forced to cut back on essential services.”