The National Taxpayers Union – in a new letter to Senate Finance Committee Chairman Ron Wyden and Ranking Member Mike Crapo outlining the organization’s 2021 tax policy priorities – laid out yet another compelling argument for why lawmakers need to take a hard look at how large credit unions continue to game the nation’s tax system. The taxpayer advocacy group argues convincingly that mega credit unions unfairly benefit from an illegitimate and unlevel tax playing field, hiding behind the decades-old canard that credit unions exist solely to serve financially vulnerable consumers.
The NTU is a widely respected voice on tax issues that has long echoed our call to reform large credit unions, whose “business plan” is to compete with traditional banks by taking breathtaking advantage of the outdated federal tax code that lets them dodge federal income taxes. While the rest of us are paying our fair share, these large credit unions are essentially using taxpayer subsidies to buy banks, expand their membership and move into new communities where they will continue their freeriding behavior.
The NTU’s full letter can be read here.
As the NTU wrote in its letter: “We believe that this Committee has a responsibility to demand enhanced transparency from the credit union industry, examine potential abuses that run counter to an institution’s tax-exempt purpose, and enact reforms. Specifically, in your jurisdiction, the Committee should consider revenue-neutral tax adjustments, extending 990 compliance, subjecting unrelated business income to taxation, and requesting the GAO conduct a study on further reforms to the industry.”
At Explore Credit Unions we could not agree more. It is long overdue for lawmakers and regulators in Washington and beyond to expose large credit unions for their gross hypocrisy and outsized greed. Demand accountability, transparency, and honesty. Insist that large credit unions live up to their mission and purpose. And if they refuse – or, rather, when they refuse – hold their feet to the statutory and regulatory fires by making them pay their fair share in federal income taxes.
The NTU letter comes on the heels of its devastating takedown of large credit unions last year.
We urge all lawmakers and regulators to carefully read this NTU report and incorporate its policy suggestions immediately.