WOCCU Takes Pre-Emptive Stance Against CU Tax Threats in Costa Rica
SAN JOSE, Costa Rica -- U.S. credit unions aren't the only financial cooperatives that face taxation threats at the hands of bank lobbying efforts.
The Alabama Credit Union League and the World Council of Credit Unions traveled to Costa Rica last month to facilitate an international effort to fight tax threats facing that country's credit unions. The Alabama league partners with Costa Rica's Federaci??n de Cooperativas de Ahorro y Cr?(C)dito (FEDEAC) through WOCCU's International Partnership program.
Officials from the American delegation, which included WOCCU CEO Pete Crear and Alabama league CEO Gary Wolter and Chief Operating Officer Vicki Williams, met with Costa Rican President Oscar Arias S??nchez and other Costa Rican lawmakers to speak out in favor of tax-free credit unions.
"No matter how successful they are and no matter where they're located, credit unions are member-owned financial cooperatives and should not be taxed," Crear said. "Our goal is to help Costa Rican lawmakers understand the differences between credit unions and banks and then legislate appropriately."
Credit union membership is growing at a rate of roughly 15% per year in Costa Rica, where a few credit unions even exceed some banks in terms of asset size. In the past decade, credit unions have increased market share from 3% to 12% in terms of assets, which the banking industry turned around to present the cooperatives as an untapped source of tax revenue to lawmakers.
For now, at least, Costa Rican legislators expressed support for credit unions and their potential to improve wealth distribution among rural populations.
President S??nchez spoke favorably about credit unions as a way to extend service to the country's rural poor, said Victor Miguel Corro, WOCCU's International Partnerships manager, who escorted the contingent to Costa Rica.
Corro reported Sanchez also appreciated the solidarity shown by WOCCU in support of Costa Rica's credit unions, as well as how such external support might foster the growth of his country's financial cooperatives.
WOCCU and FEDEAC officials pledged to monitor legislative activities and respond promptly to any further threats.
"An international lobbying effort carries a lot of weight," said Manuel BolaAE'os, FEDEAC's CEO. "We drove the point that credit unions aren't driven by profit, but rather by the philosophy to serve members."