Reacting to Canadian credit union executives touting thebenefits of paying tax, several U.S. credit unions told CreditUnion Times they will continue to support efforts to protecttheir tax-exempt status.

Gene Blishen, general manager at Mount Lehman Credit Union inCanada and William Azaroff, director of business and communitydevelopment at Vancity, a financial co-operative in Canada,recently said if credit unions in the U.S. paid tax, they wouldhave more influence on the political process.

“I don't know if you can be at the table if you don't pay thetax and the tax isn't onerous. You can advocate for a smaller taxand that brings the whole advocacy process into place but I believethat if you're not paying taxes, I don't think those doors will beopen for those types of discussions,” said Blishen at the CU Water CoolerSymposium last week in Nashville, Tenn.

“If the thing that says we can't do business lending is taxesthen … pay taxes, get that off the table and do this because it'simportant work,” said Azaroff. “What do you need to do to be usefulto suffering economies? That's the thing that boggles me looking atthe States.”

Azaroff said the U.S. has been through worse economic timescompared to Canada but American credit unions are more worriedabout taxes.

“You guys have been through much worse times than we have andhere's this engine of economic development spread across yourcountry and instead the conversation is about taxation,” hesaid.

“This 'Don't Tax My CU' thing – to me that like hit me over the sideof the head like a hammer – like whatever you do, if we're at thepoint of engaging members with our tax status, we've got nothingleft to talk about. That to me is mind-bogglingly crazy,” headded.

Jim Blaine, president of the $26.7 billion State Employees'Credit Union in Raleigh, N.C. disagreed with Azaroff andBlishen.

“Canadians aside, taxation of credit unions is a 'red herring'issue. This is the classic 'have you stopped beating yourwife yet' question,” he told Credit Union Times.

“Rather than seeking ways to diminish credit unions, Congressshould stay focused on the true financial task at hand –proscribing, and hopefully prosecuting, the continuing egregiouscorruption and criminality endemic in the banking industry over thelast decade. Let's not get distracted with where the trueproblems lie in the American financial system,” Blaine added.

The $54.4 billion Navy FCU in Vienna, Va. told Credit UnionTimes that it continues to support NAFCU's position on creditunions' tax-exempt status.

“Navy Federal is proud to provide the service, products andconvenience that help our more than four million members managetheir finances and achieve financial success. We support NAFCU'sposition on why the tax exemption for credit unions benefitsconsumers, businesses and the economy,” said a statement providedto Credit Union Times.

“Their 2012 Tax Exemption Study highlights thesebenefits and solidifies the reasoning on why the tax exemption forcredit unions should remain.”