An independent study by Dr. Robert Feinberg of American University and Dr. Douglas Meade of Interindustry Economic Research Fund Inc., details the many economic benefits stemming from the credit union tax status to consumers and the economy at large. 

Exclusively reported on by American Banker, the study reveals consumers would pay a steep price if credit unions were to lose their tax status. In addition, although bank lobbyists are at the forefront of efforts calling for a new tax on credit unions, Feinberg and Meade found that taxing credit unions would raise costs for both credit union and bank consumers. 

"Our analysis indicates that removing the credit union tax exemption would cost the federal government $33 billion in lost income tax revenue over the next 10 years. GDP would be reduced by $266 billion, and 822,000 jobs would be lost over the next decade as well," write the researchers. "The benefit of better credit union loan and deposit rates extends to bank customers as well, due to increased competition. A 50% reduction in the credit union market share would cost bank customers an estimated $11.9 billion to $22.8 billion per year in higher loan rates and lower deposit rates." 

America’s Credit Unions commissioned the independent study.  

“For 90 years, credit unions have stood the test of time because of the measurable results they bring to communities across the country – many who have been left behind by the banks with few alternatives that are safe, insured, and regulated. This study proves the real impact of the credit union difference, with higher interest rates for savings, checking, and money market accounts while providing the lowest rates on real estate and auto loans. Access to these offerings is the difference between success and failure when it comes to everyday Americans’ ability to achieve their American Dream. That's what credit unions do,” said America’s Credit Unions President/CEO Jim Nussle. 

“As 6,000 credit union advocates descend on Capitol Hill next week, they are well aware of the bank lobby trying to counter and dissuade the stories and messages from 140 million Americans who chose credit unions as their financial institution. What the banks won’t tell lawmakers is that removing the credit union tax status will significantly hamper the economic prosperity of our country over the next decade with the price tag of $33 billion in lost tax revenue, our GDP will be reduced by $266 billion, and 822,000 jobs will be lost. Bottom line: if credit unions weren’t in the market, Americans would lose billions over the next decade and the most vulnerable and underserved communities would have little to no access to financial services to help them achieve their best lives.”