WASHINGTON – Ending credit unions' federal tax exemption wouldcost the country billions in lost revenue and jobs, according to astudy commissioned by NAFCU and released Wednesday during the trade group's Congressional Caucus.

Research presented in a report – titled “Economic Benefits ofthe Credit Union Tax Exemption to Consumers, Businesses and theU.S. Economy” – found that loss of the credit union tax exemptionwould cost the federal government $15 billion in lost tax revenue,$148 billion in GDP, and 1.5 million lost jobs over the nextdecade.

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“This study shows how vitally important credit unions are to allAmericans, not just those who are members of a credit union,” saidNAFCU CEO Fred Becker. “It is clear that the benefits of the credit uniontax exemption are a great boon to our overall economic welfare andprosperity and that its preservation should be of the highestpriority.”

Researchers found that consumers benefited by $10 billion peryear because credit unions are exempt from federal taxation andthat, counter intuitively, taxing credit unions would result in anet tax loss of $1.5 billion because of the loss in consumer incomefrom fewer credit unions in the marketplace, NAFCU said.

The study also found that bank customers benefit from creditunions as well because of increased competition keeping rates low,the trade group said.

The total cost to bank customers if there were a 50% reductionin credit union market share ranges from a low of $2.4 billion to ahigh $6.3 billion per year over the period 2005-2011 in higher loanrates and lower deposit rates, totaling almost $30 billion, thetrade group said its research showed.