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Bellco Credit Union doesn’t have to pay unrelated business income tax on its income from credit insurance or on royalties from accidental death and dismemberment insurance. On a technicality, it does have to pay a UBIT on income from credit insurance and on its profits from credit insurance sales of the Credit Union Indirect Lending Association, a federal judge ruled Friday.

“In the banking and credit union context, the concept of thrift is tied to sound financial management…Credit insurance does just that…For a relatively marginal payment, the borrower buys peace of mind,” U.S. District Judge Christine Arguello wrote.

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