The 70,000-member, $1.6 billion Technology Credit Union is arguing that the possibility credit unions might be taxed in the future is a reason its members should vote to change the credit union into a bank.
In its Notice of a Proposal to Convert document, the credit union reported that a subcommittee of President Obama's Economic Recovery Advisory Board had listed eliminating the federal tax exemption for large credit unions as a possible way of raising federal revenues in August 2010 and mutual savings banks and savings and loan associations had been tax exempt until 1951.
“While we cannot predict whether credit unions will lose their federal tax exempt status, the Tech CU Board and management believe....that the repeal of the tax exemption, particularly for large credit unions such as Tech CU, has in recent years become a possibility to be considered and, as a result, consider this as one of many factors in evaluating the Charter Change,” the credit union wrote.
