WASHINGTON -- Credit unions should remain tax exempt because of the work they do as a provider of lower priced financial services, NAFCU President Fred R. Becker Jr. wrote The Wall Street Journal.
"Credit unions have enjoyed tax-exempt status because of the unique service they provide as not-for-profit, member-driven financial institutions serving the needs of member/consumers, especially those of lesser income. Credit unions pay many taxes and fees, including payroll and property taxes, but Congress has determined that federal income taxation of member-owned shares in a credit union would put a 'disproportionate and excessive' burden on credit unions," Becker wrote in a letter published Saturday in the newspaper.
Becker was responding to a letter published on Aug. 19 from John D. Harris of Dayton, Ohio in which Dayton said if there is problem with corporate credit unions there should not be a government rescue because "credit unions are quite profitable. They have billions of dollars in retained earnings on their balance sheets that they would have us all believe come from the tooth fairy. The big distinction is that 'not-for-profit' translates into 'federally tax exempt.' hey pay no income tax. So please no federal bailout here.
Harris wrote the letter in response to a front-page article in the newspaper on Aug. 11 about the losses suffered by some corporate credit unions because of the mortgage crisis.