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Taxing Developments for Credit Unions
The House Ways and Means Committee is considering a move that would do away with tax exemptions to credit unions. They've been exempted from paying taxes for 70 years. Credit Union reps say if taxation comes to fruition, it effectively puts them out of business.
Mike Lanotte, of the Credit Union Association of NYS, says the mission of credit unions, to serve members in certain organizations, who work for specific employers, or live in certain communities, has never changed. However, Bob Dieterich of First National Bank of Scotia says some credit unions have grown much larger than they were ever intended to be, and that their tax exemptions give them an unfair advantage over traditional banks.
Below is a statement from the New York Bankers Association, received earlier today: “The New York Bankers Association supports the repeal of the tax exemption for credit unions – especially for large, complex credit unions. Tax-exempt credit unions, which now compete directly with banks in communities throughout New York State and generally offer the same products and services as banks, do so at a significant competitive advantage to tax-paying banks. In fact, the Office of Management and Budget has estimated the credit union tax exemption at almost $10 billion nationally over the next five years. Credit unions benefiting from their tax exemption, will continue to grow at the expense of their tax-paying, bank competitors. Neither banks, or the economy at large, can continue to afford or justify a government subsidy of this magnitude."