Fighting for CU right to tax-exemption
WEST PALM BEACH, Fla. -First Entertainment Credit Union CEO Charles Bruen, who is also chairman of the California Credit Union League's task force on alternative sources of capital, defended credit unions' tax-exempt status in a letter to the editor responding to an October 2001 U.S. Banker article entitled Endangering The Movement. "I disagree that credit union efforts to identify other forms of capital amount to show business razzle dazzle," said Bruen. "But your commentary definitely has a Hollywood ring to it. In its attempt to create fear by invoking the tax status of credit unions, the article is just another retread of that B-grade horror staple, The Thing That Wouldn't Die." Bruen then attributed the article to banker confusion since "everything in the banking world carries a profit motive." He went on to explain that credit unions need capital like any business. "Exactly why would issuing additional shares to our members-or to non-members- automatically turn us into for-profit entities intent upon enriching ourselves rather than members," said Bruen. "So once more with feeling: Credit unions are tax-exempt because we are non-profit, member-owned, one-member-one-vote cooperatives." Bruen added that expanding sources of capital available to credit unions would not change that fundamental structure.