Egan defends credit union tax status

In a column entitled “Credit Unions Fight To Protect Tax Exemption” which appeared in the July 8 edition of Banker and Tradesman, League President Dan Egan explained that credit unions have been successfully defending their tax status against banker attacks since the earliest days of the movement.  In the piece, Dan presented the cornerstone argument for tax exemption for credit unions: “We were set up as a not-for-profit.  It’s a cooperative.  And I’ve always said to any bank, including mutual community banks, we’d be more than glad to see you convert, as long as you deal with the restrictions the credit unions have.”

In the course of the piece, columnist Nora Tooher provided some of the arguments that banks have used over the years to argue for credit union taxation along with Dan’s rebuttal for each of them.  For example, to the bankers' perennial argument that additional business lending powers should bring taxation, Dan cited the fact that these powers will not cost the taxpayer a dime and that the restrictions imposed in the 1990s were completely arbitrary. 

The article concludes with Dan explaining the value of the credit union alternative to not only the member but to society at large.  It stated: “Credit unions in Massachusetts and throughout the country have served a vital role since then, providing banking services to minority and low-income populations and establishing a not-for-profit, cooperatively owned banking system.  During the 2007-2008 subprime mortgage collapse, while the nation’s major banks self-imploded, credit unions continued their lending and maintained the flow of money to consumers and small businesses.  The parallel banking system that credit unions offer is as valuable now as it was 105 years ago.  And that’s something Egan thinks is worth fighting for.”