The National Association of Federal Credit Unions submitted a comment letter on Friday to the House Ways and Means Committee’s working group on tax reform to express support for the credit union federal income tax exemption.
NAFCU President and CEO Fred Becker said in a letter to Reps. Adrian Smith (R-Neb.) and John Larson (D-Conn.), the chairman and vice chairman of the working group, respectively, that the tax exemption is “an issue of survival” for credit unions.
“In other countries where the tax exemption has been eliminated for credit unions, the number of credit unions has declined dramatically,” Becker said. “Without credit unions, which serve to provide checks and balances in the marketplace, for-profit banks would likely increase rates and fees on consumers.”
Becker also pointed to support for the exemption from The Military Coalition, a 5.5-million member organization of uniformed services and veterans associations, which recently said credit union members would “realize a greater financial burden” if the credit union tax exemption were eliminated.
Additionally, in the letter, NAFCU pointed to an independent study released by the organization last year that found credit unions to provide more than $10 billion per year in benefits to Americans, regardless of membership in a credit union.
“Eliminating the credit union tax exemption would result in the loss of 150,000 jobs a year, a shrinking of the GDP and a net loss of revenue to the federal government,” the letter said. “If the tax exemption was removed, many would convert to banks or just go away. Without credit unions, which serve to provide checks and balances in the marketplace, for-profit banks would likely increase rates and fees on consumers.”