Reacting to Canadian credit union executives touting the benefits of paying tax, several U.S. credit unions told Credit Union Times they will continue to support efforts to protect their tax-exempt status.
Gene Blishen, general manager at Mount Lehman Credit Union in Canada and William Azaroff, director of business and community development at Vancity, a financial co-operative in Canada, recently said if credit unions in the U.S. paid tax, they would have more influence on the political process.
“I don’t know if you can be at the table if you don’t pay the tax and the tax isn’t onerous. You can advocate for a smaller tax and that brings the whole advocacy process into place but I believe that if you’re not paying taxes, I don’t think those doors will be open for those types of discussions,” said Blishen at the CU Water Cooler Symposium last week in Nashville, Tenn.
“If the thing that says we can’t do business lending is taxes then ... pay taxes, get that off the table and do this because it’s important work,” said Azaroff. “What do you need to do to be useful to suffering economies? That’s the thing that boggles me looking at the States.”
Azaroff said the U.S. has been through worse economic times compared to Canada but American credit unions are more worried about taxes.
“You guys have been through much worse times than we have and here’s this engine of economic development spread across your country and instead the conversation is about taxation,” he said.
“This ‘Don’t Tax My CU’ thing – to me that like hit me over the side of the head like a hammer – like whatever you do, if we’re at the point of engaging members with our tax status, we’ve got nothing left to talk about. That to me is mind-bogglingly crazy,” he added.
Jim Blaine, president of the $26.7 billion State Employees' Credit Union in Raleigh, N.C. disagreed with Azaroff and Blishen.
“Canadians aside, taxation of credit unions is a ‘red herring’ issue. This is the classic ‘have you stopped beating your wife yet’ question,” he told Credit Union Times.
“Rather than seeking ways to diminish credit unions, Congress should stay focused on the true financial task at hand – proscribing, and hopefully prosecuting, the continuing egregious corruption and criminality endemic in the banking industry over the last decade. Let’s not get distracted with where the true problems lie in the American financial system,” Blaine added.
The $54.4 billion Navy FCU in Vienna, Va. told Credit Union Times that it continues to support NAFCU’s position on credit unions’ tax-exempt status.
"Navy Federal is proud to provide the service, products and convenience that help our more than four million members manage their finances and achieve financial success. We support NAFCU's position on why the tax exemption for credit unions benefits consumers, businesses and the economy,” said a statement provided to Credit Union Times.
“Their 2012 Tax Exemption Study highlights these benefits and solidifies the reasoning on why the tax exemption for credit unions should remain."