The Advocate, January 28, 2020: Credit unions are valuable for members, communities
As we ease into tax season, it’s important for consumers to know why some organizations are exempt from paying federal and state taxes. Recently, Robert Taylor of the Louisiana Bankers Association issued his annual article questioning why credit unions are exempt from paying federal taxes.
The answer is simple. Unlike banks, credit union earnings are returned to member-owners, who are taxpayers themselves. These taxpayers already bear a substantial income tax burden. Therefore, taxing credit unions is an additional tax on 119 million Americans, including 1.2 million credit union members in Louisiana.
Credit unions pass all profits to members in the form of a higher yield on savings, lower than average interest rates, fewer and lower fees as well as enhanced products and services. In fact, Louisiana credit unions provided $164,453,808 in direct financial benefits in 2019 for residents. If Louisiana banks were structured like credit unions, the $3.2 billion banks paid in stockholder dividends over the past decade would have, instead, been given directly back to Louisiana citizens.
