Modern credit unions have outgrown their preferential tax and regulatory treatment and have escaped proper scrutiny for far too long. While credit unions continue to evolve and expand well beyond the scope of their original mission, American taxpayers are picking up the bill. Tell policymakers it’s time to examine and modernize the laws and regulations for credit unions.
Modern credit unions have lost their way.
As a result of their outdated, historic protections, credit unions avoid various forms of taxation —leaving American taxpayers to cover the costs of their $2.2 trillion industry.
Credit unions were formed during the Great Depression and given a tax exemption to help those in need. Now, the industry has sought changes to allow expansion beyond that original mission.
Today’s credit unions are growing in ways that were never contemplated when the rules and tax laws were written in the 1930s. Now credit unions are practically indistinguishable from banks, except that they don’t pay federal income tax.
Credit unions claim their mission and structure enable them to help the underserved, but there’s no way to verify this. In fact, credit unions are exempt from common reporting requirements like the Community Reinvestment Act.
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