Leaders and members from South Dakota’s credit union industry convinced a county commission last week not to endorse a resolution supported by the South Dakota Bankers Association that would eliminate the tax exemption for credit unions.
“The [Brookings] County Commission decided it was not in their realm of responsibility to consider an item that had federal implications,” Jeff Olson, the vice president of advocacy and awareness at the Credit Union Association of the Dakotas, said, according to Credit Union Times. “Simply put, we made our case that any resolution that the committee would support was an endorsement of one business over another.”
The SDBA supported a proposal that would eliminate tax exemptions for credit unions and the Farm Credit System, saying credit unions no longer serve their original purpose of providing banking and lending services to everyday community members and that the exemption deprives local, state and federal governments from tax revenue, Prairie Business reports.
CUAD President and CEO Robbie Thompson said banks have challenged the CU tax exemption before but Congress has allowed the exemptions to remain in place because they benefit American consumers.
Olson said that the commission would have essentially imposed a tax on 251,000 credit union members in South Dakota if it passed the measure, according to Credit Union Times.
“Given the fact that the South Dakota banking chair lives and operates a successful bank in Brookings, getting the county commission to kill the resolution is a big win for credit unions and credit union members in South Dakota,” Olson said, Credit Union Times reports.