"Don't Tax My Credit Union" is a national campaign dedicated to ensuring Congress doesn't raise taxes on credit union members nationwide and preserves financial choice for consumers. Join us today to share your story and tell Congress: Don't Tax My Credit Union!
Over the past several years we've informed our members about legislative issues that would negatively impact PSECU and our ability to serve you. This time, the issue is federal tax code reform. The House Ways and Means Committee is basically starting from scratch, and all exemptions are getting a new look, including the one that's been in place since the 1930s that exempts credit unions from paying federal corporate taxes.
Preserving this exemption is crucial for you, your credit union and credit unions around the country. This page explains the details. We hope that after learning more about this issue, you will understand why protecting the exemption is in your best interest. Ultimately, we need you to tell Washington "No" to CU taxation.
Taxing Credit Unions Mean Less Consumer Choice
The move to have credit unions pay corporate federal tax could be seen as one that's less about reducing the deficit and more about eliminating an important consumer alternative to banks. After all, credit unions hold only 6% of all financial assets nationwide and banks hold the rest. Our exemption would be a small drop in the $642 billion deficit bucket. If a federal corporate tax is applied to credit unions, however, smaller credit unions might not be able to stay in business, and that means less choice for consumers. Competition from credit unions has helped keep banks in check.
Credit unions who can continue might have hard choices to make. At PSECU, we may have to increase fees or charge more for loans. Certainly a program like our relationship reward would be in jeopardy. We estimate that applying a federal corporate tax to PSECU would add approximately $10 million to our annual expenses, about the same amount as the 2012 relationship reward.
Taxing Your Money Twice Isn't Fair
We support the idea of all taxpayers paying their fair share. The CU taxation issue, however, is not fair. As a member-owner of this credit union, the credit union's money is your money, which you've already been taxed on. If PSECU gets taxed, your money is getting taxed twice.
Reasons For The Exemption Haven't Changed
As a member, you know that PSECU is a financial cooperative, which means it is owned and directed by you and is non-profit. Unlike banks that maximize profits for a small group of investors, credit unions exist to serve their members. We do that by returning benefits to our members in the form of low or no fee products and services, and lower Annual Percentage Rates (APRs) on loans. It was because of our structure and dedication to our members that credit unions were granted the tax exemption in 1934 and neither of those things has changed over the past 79 years.
Help Preserve The Exemption
It's easy to have your voice be heard. Take action by simply writing your legislators and show them how your credit union lives the Credit Union Difference and deserves its tax exemption.
Thank you for your help on this important issue, and as always, thank you for your membership.