ARLINGTON, Va. — CUSO activities are not big income generators for state-chartered credit unions regardless of their size, according to the NASCUS Survey of the State Credit Union System, which was released yesterday.
The survey, prepared for Representative Bill Thomas (R-Calif.) of the U.S. House of Representatives Committee Ways and Means, who requested information regarding state-chartered credit unions use of their tax-exempt status, showed that among state-chartered credit unions with less than $50 million in assets, only 3.25% of those reporting CUSO investments received more than $10,000 in annual net income. The survey collected data from 502 credit unions.
Approximately 39% of state-chartered credit unions with more than $500 million in assets with CUSO investments reported earning more than $10,000 annually in net income from a CUSO, according to the survey. These same credit unions said net income in a CUSO accounted for less than $1,000 of their income.
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"The numbers suggest, however, that the predominate purpose of the CUSO investments was to provide services at a lower cost to the state-chartered credit unions and their members, not to generate profit," the survey reads.
The majority of credit unions, both large and small, reported using CUSOs mainly for back-office functions such as mortgage and item processing.
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