ABA Poll: Congress Should Investigate CU Tax Exemption
Many respondents didn’t know credit unions were tax exempt.
Americans believe that Congress should take a look at whether credit unions continue to deserve their federal tax exemption, according to a new poll sponsored by the American Bankers Association (ABA).
In the poll, conducted by Morning Consult, people were asked:
“It has been nearly 20 years since Congress last held a hearing to conduct oversight of the federal tax exemption that credit unions receive. Do you agree or disagree that Congress should examine whether credit unions are providing enough community benefit to warrant receiving a tax exemption?”
Among those responding, 62% said that they were strongly or somewhat in support of such an inquiry.
Morning Consult polled a national sample of 2,211 adults between Sept. 20 and Sept. 23, according to the ABA. Interviews were conducted online, and the data were weighted to “approximate a target sample of adults based on age, race/ethnicity, gender, educational attainment, and region. Results from the full survey have a margin of error of plus or minus 2 percentage points.”
The ABA also reported that, among those polled:
–54% of respondents were unaware that credit unions did not pay federal taxes, while 28% believed that they do pay federal taxes.
–Only 18% said that credit unions were tax-exempt.
–49% of those polled said credit unions should pay federal taxes, while 44% said they had no opinion.
ABA Calls for Change
An ABA official said that the poll showed credit unions have outlived their right to have the federal tax exemption.
“Credit unions have a congressionally mandated mission to prioritize service to lower and middle-income communities; however, they increasingly prioritize growth by advocating for changes to membership rules, raising money from investors, and even buying banks,” said Robert Flock, the ABA’s vice president of strategic engagement.
CU Trades Push Back
However, in a joint statement, CUNA President/CEO Jim Nussle and NAFCU President/CEO Dan Berger said that banks are leaving communities behind, while credit unions are stepping up to serve those communities.
They noted that credit union members saw nearly $14 billion in benefits last year alone, and non-members saw an additional $5.3 billion simply due to credit unions’ competitive presence.
“Congress shouldn’t waste a second of its busy schedule examining one of the most powerful pro-consumer forces in our country,” they said, adding, “The credit union tax status is continually supported by policymakers because they recognize that it is one of the best—if not the best—investments that can be made in consumers.”