South Dakota credit unions scored a victory this week after the Clay County Commission voted 5-0 to table indefinitely the South Dakota Bankers Association’s case for eliminating the credit union tax exemption.
Following a debate and response from the Credit Union Association of Dakotas, the committee took no action on a request by the SDBA to consider its “Equalization in Taxation” resolution proposal.
The case follows a similar decision made by the Brookings County Commission in S.D., which opted to not support a proposal from the SDBA that would eliminate the tax exemption for not-for-profit credit unions. Last month, the SDBA presented a similar proposal to the Yankton City Commission, which also tabled the resolution for a later date.
The SDBA has said credit unions have grown beyond their intended size and scope and that eliminating the exemption would allow city, state and federal governments to solve budget shortfalls.
In a state-wide conference call last week, credit union leaders in South Dakota advised members to be vigilant in identifying efforts by banks to eliminate the credit union tax exemption.
Credit unions across the country have fought to protect their tax-exempt status, given to them because they operate as not-for-profit entities with volunteer boards of directors. Profits are passed along to members in the form of higher interest rates on savings accounts and reduced loan interest rates, TBJNow reports.