Tax Exemption a 'Security Blanket'
We have an 11-year-old granddaughter, and I vividly remember her as an infant receiving a warm, comfortable blanket. Before long she was calling the blanket “Blanky.” Blanky gave her comfort serving as a pillow, covering her when she was cold and when something upset her, she could always depend on Blanky for comfort. Today, Blanky is a shredded dim remnant of a blanket that would hardly even qualify as a rag, yet our granddaughter still clings to it. She no longer carries it everywhere, but she will not let our daughter throw it away.
Just like my granddaughter, the credit union industry clings to its tax exemption as the one thing that brings all good things to credit unions.
While we hang onto this crutch, the banking industry uses it as a club to beat back any change that would make credit unions more competitive. During the financial meltdown, TARP funds bailed out the profit-motivated banks. Credit union industry leaders said, “We can’t ask Congress for help to cover our corporate credit union losses because it will hurt our tax exemption.”
Today, we are paying a very high “tax” in annual assessments to cover these losses that will continue for another decade. Not only is this tax high, but it is arbitrary and set at the will of the NCUA without oversight or accountability to anyone.
We, credit unions, need to have a tea party. No taxation without representation!
Congress just went through a bitter battle over the debt ceiling and deficit. As a result, a 12-member congressional committee will be working on additional ways to reduce the deficit with budget cuts and enhanced revenues.
As usual, CUNA and NAFCU are already filling our email boxes with pleas to contact our congressmen to protect our tax exemption.
What could we get if credit unions did give up their tax exemption? Could we get expanded business loan capabilities, alternative capital or something we haven’t even considered yet? We won’t know unless someone starts a conversation and asks the question.
I know one day my granddaughter will no longer depend on Blanky to comfort her. Hopefully, the credit union industry can also let go of the idea that tax exemption is the only thing ensuring our survival.
Cary J. Anderson
Main Street Financial FCU
Baton Rouge, La.