LTE: Hodge’s flawed argument on credit union tax status
America's Credit Unions
One united voice to advance the credit union industry.
By Jim Nussle and John Bratsakis, CUDE ?
A recent op-ed by Scott Hodge contains a number of inaccurate assertions that must be corrected.? Allow us to set the record straight.?
The core argument of Mr. Hodge’s piece – that credit unions are growing and therefore must be taxed – is flawed. It asserts that credit unions are tax exempt because they were created to be small institutions that serve those deemed insignificant by banks – those who are too poor or have too few assets to make the bank money. It claims credit unions should not compete with banks.?
This is radically wrong.??
Let us quote the Federal Credit Union Act: “Credit unions, unlike many other participants in the financial services market, are exempt from Federal and most State taxes because they are member-owned, democratically operated, not-for-profit organizations generally managed by volunteer boards of directors…”???
The credit union tax exemption comes from their structure as not-for-profit cooperatives, which puts the interests of their members above profits. Credit unions succeed when their members succeed, and they often go above and beyond to provide services they desperately need. This contrasts with banks, where success means squeezing every penny of profit out of each one of their customers.???
Mr. Hodge also cites studies that claim “credit unions increasingly serve upper-income families and have a smaller share of low-income customers than banks.”? However, the unbiased Federal Reserve Survey of Consumer Finance shows the mean income of a credit union member is $99,000, whereas the mean income of a bank customer is $160,000. Even more revealing: The mean net worth of a credit union member is $532,000 compared the mean net worth of a bank customer of $1,276,000 – more than double that of a credit union member.? The facts speak for themselves.?
In the end, the fact that credit unions are growing is proof that Americans are recognizing the credit union difference – not proof that credit unions have strayed from their mission. Consumers are tired of banks treating them terribly. Competition is a good thing that benefits consumers and the U.S. economy. Banks fear it and want Congress to take away their competition.?
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Jim Nussle is president/CEO of America's Credit Unions . ?
John Bratsakis is president/CEO of the MDDC Credit Union Association .
Commercial Real Estate Broker
4 个月The documentary linked below titled, Unions of DisCredit, is about the Credit Union Cartel, the Profiteers of Tax-Exempt Banking, and exemplifies why tax-exempt status for credit unions should be revoked. The documentary is about a case currently before the Ninth Circuit Court as a civil matter, that involves a criminal conspiracy funded and directed by two large credit unions and their mutual insurer, CUNA Mutual, now known as Trustage, owned by and on behalf of, 5,000 other credit unions (i.e., the Credit Union Cartel). The criminal conspiracy by the Credit Union Cartel involved having attorneys as officers of the court perpetrate extrinsic and other fraud on the court schemes in state and federal courts over eight years, to enforce a legally unenforceable provision in confidential credit union employee separation agreements that prohibited those employees from raising allegations of credit union wrongdoing with governmental agencies. The documentary can be viewed at www.youtube.com/watch?v=i2szzbxkuEQ in HD or downloaded in UHD at https://drive.google.com/file/d/1lZPU0_RoRr-toTaqs5J9I8Vw2jB0GWoG/view and can be freely shared without limitation.
Doctor of Information Assurance -Technology Risk Manager - Information Assurance, and AI Governance Advisor - Adjunct Professor UoF
8 个月This rebuttal highlights the intrinsic value of credit unions as not-for-profit, member-owned institutions and underscores a fundamental principle of economic democracy. At the heart of the debate is that financial services can and should serve the broader public good, not just the interests of a select few seeking profit maximization. By emphasizing the democratic operation and management of credit unions, the rebuttal calls attention to an economic model that prioritizes human needs over profit, fostering a more inclusive and equitable financial landscape. The growth and success of credit unions should not be misconstrued as a deviation from their foundational goals but rather celebrated as evidence of their vital role in creating a more inclusive and fair financial system. Credit unions exemplify the principle that when financial institutions prioritize community over profit, they don't just grow—they elevate the economic well-being of society as a whole.
Executive Headhunter | People Connector | Dad
8 个月Great clarification. Few professionals understand the not-for-profit space well.