Recent credit union member growth, resulting in part from last year's "Bank Transfer Day," is an indication that Americans want choices besides banks, and the credit union tax exemption helps ensure that they will find affordable alternatives, Credit Union National Association (CUNA) President/CEO Bill Cheney said in a letter to House Ways and Means Oversight Subcommittee Chairman Charles Boustany (R-LA).
The letter came in response to a banker request that the subcommittee hold a separate hearing on the tax status of credit unions.
In his letter to Boustany, Cheney stated that reasoning behind the credit union tax exemption remains strongly in place. "Inasmuch as there has been no change in the ownership structure of credit unions and credit unions continue to fulfill their mission, as evidenced by their growth and the substantial positive variance in benefits compared to cost, suggestions that the credit union tax status should be altered in any way should be rejected," Cheney wrote.
Cheney also provided a summary of the history of the credit union tax exemption, and a recounting of more recent events regarding the financial crisis in the nation. "Credit unions did not cause the financial crisis, and did not need a taxpayer-funded TARP bailout to survive," Cheney wrote. "One of the reasons that this has been the case is that the not-for-profit credit union ownership structure is fundamentally different than the for-profit bank ownership structure," he added.
The subcommittee on Wednesday discussed the operations of tax-exempt organizations, but the subcommittee members did not discuss the credit union tax status during that hearing.