On behalf of Louisiana credit unions and their nearly 1.2 million members, I am writing in response to the letter, “Credit unions must pay their taxes.” Robert Taylor, CEO of the Louisiana Bankers Association, once again attacks the credit union tax-exemption status, claiming “everyone has an obligation to contribute to the federal government to provide needed services.”
Banks struggle with the reasoning behind why credit unions are tax exempt. Credit unions do pay federal, state and local taxes as any business, such as employment and property taxes. Credit unions are exempt from paying corporate income taxes because earnings are returned to members, who are taxpayers themselves. They are not shareholders in for-profit businesses like banks.
Additionally, credit unions are regulated extensively by state and federal government. We follow many of the same guidelines as bankers do. Unlike banks, credit unions always have and always will exist to help people, not make a profit. We give back in ways that bankers don’t.
Credit unions’ members can enjoy the advantage of historically lower loan rates, higher savings rates and superior service. Earnings of a credit union, minus operating expenses, are returned to our members in the form of higher-than-average dividends, lower-than-average rates charged on loans and enhanced products and services.
As a credit union member, you are an owner. Our boards of directors are unpaid volunteers who offer their time and energy in hopes of seeing the credit union prosper and grow, unlike banks, who pay their shareholders. Other financial institutions are governed by boards and investors, who are generally compensated. Their earnings, minus operating expenses, are divided among stockholders.
Building personal relationships and maintaining exceptional service is our top priority, and they are fiercely loyal for this reason.
Anne Cochran, president/CEO
Louisiana Credit Union League