Don’t Tax My Credit Union: Why It Matters to You

Credit Unions: Built to Serve, Not Profit

Credit unions have long been a cornerstone of community support, providing affordable financial services to individuals and families who might otherwise be overlooked by traditional banks. Their not-for-profit status allows them to reinvest earnings back into their members, offering lower fees, better interest rates, and personalized service. However, this unique model is under threat from proposed legislation that seeks to impose taxes on credit unions, potentially undermining their ability to serve members effectively.

Credit Unions and Taxes: A Common Misconception

A common misconception is that credit unions don’t pay taxes. In truth, they pay millions annually in property, payroll, and sales taxes. The only exemption they receive is from federal income tax, a deliberate decision by lawmakers to support credit union’s unique mission of member service over profit. This exemption allows credit unions to reinvest those funds directly into member services, such as:

• Lower loan rates and higher savings yields
• No- or low-fee accounts
• Financial education and literacy programs
• Local charitable and community investments

Taxing credit unions would reduce their ability to offer these benefits, ultimately harming the members who rely on them.

What’s at Stake for Members and Communities

1. Reduced Member Benefits
 Imposing an income tax on credit unions would reduce the funds available for member benefits, leading to higher fees and reduced services. This would disproportionately affect families who rely on credit unions for affordable financial solutions.

2. Less Community Investment
 Credit unions play a crucial role in supporting local economies. By keeping money within the community, credit unions help to foster economic growth and stability. Taxing credit unions would diminish their ability to contribute to local development projects and charitable initiatives.

3. A Threat to Advocacy and Member Voice
 As advocates for members, credit unions must ensure that their voices are heard in legislative discussions. The "Don't Tax My Credit Union" campaign empowers members to contact their representatives and express their opposition to any change to the federal law surrounding credit unions’ exemption to income tax only. It is essential that lawmakers understand the negative impact such taxes would have on their constituents.

What Can YOU Do to Support Your Credit Union?

• Stay Informed: Keep up to date with the latest developments in the proposed legislation and understand the impact it could have on you and your credit union, if passed.
• Get Involved: If so moved, write letters or emails to your representatives, attend town hall meetings, and spread the word about how important it is to you that credit unions remain exempt from paying income tax.
• Share Your Story: Personal stories about how credit unions have positively impacted your life can be compelling evidence for lawmakers. Share your experiences and highlight the importance of credit unions in your community.

The "Don't Tax My Credit Union" campaign is a testament to the power of collective action and the importance of standing up for what is right. Together, we can make a difference.