YOUR MONEY & YOUR CREDIT UNION ARE UNDER ATTACK

3 Things You Need To Know to Help Save Them ... and What Can Happen If You Don't

The Attack

The three big banking associations, American Bankers, Independent Bankers and the Community Bankers, have joined forces in an aggressive effort to pressure elected officials into adding new taxes on your credit union. According to their own national agenda, taxing credit unions is their top priority. It is even more important to them than security, fraud, ethics or terrorism. They are now meeting face to face with your elected officials to push this tax effort. They have even put a bounty on credit unions by offering a $1,000 reward to the banker with the best picture of a credit union “overreaching” its field of membership. The battle to tax you has begun and the bankers call it “Operation Credit Union.”

What Can Happen

This attack is real and the bankers are gathering support. House Ways and Means Committee Chairman Thomas agrees with them and is in favor holding hearings on the matter. If the bankers get their way and convince your elected officials to add new taxes then they will be forcing you to pay higher interest rates on your loans and new fees for services you currently enjoy for free. You could lose some services completely. Some credit unions will likely be forced out of business. With fewer credit unions around, banks will have free reign to increase their fees. All of this will mean less money for you and your family's financial security.

3 Things You Need Know

1. Your credit union already pays some taxes and is exempt from some others. Why? Because your credit union is a not-for-profit financial cooperative. That means that members like you formed the credit union to serve your needs instead of the needs of profit seeking investors and paid boards of directors. As a member, you have an equal voice in how your credit union is run. Your credit union can offer free services, lower rates and fewer fees because it is a not-for-profit financial cooperative. It doesn't pay stock dividends or directors' fees and it generally costs less to operate than other financial institutions. Your credit union has the public minded mission of "serving the savings and credit needs of consumers, especially persons of modest means" as well as teaching financial literacy. Because of the credit union's not-for-profit status, member voting rights, public mission and volunteer boards, the government has made credit unions exempt from federal and state income taxes. Your credit union’s structure does not change simply because it has more members, more assets or offers more services.

2. Your credit union works under tougher restrictions than other financial institutions. Credit unions have higher capital requirements, tighter limits on investing and lending, and restrictions on who can join a credit union.

3. For-profit financial institutions used tax loopholes to avoid paying as much as $4 billion in state taxes last year alone. That is 12 times the amount that could be raised by taxing credit unions! To put this into perspective, the entire credit union movement in the United States has about $620 billion in assets. That sounds big but J.P Morgan, Citigroup and Bank of America each have more assets than all US credit unions combined! For-profit financial institutions tend to be much bigger and make much more money than credit unions. Credit unions have maintained about 6% market share since 1993. So where is all of the competition that bankers are complaining about? It comes from the top 100 largest banks that have increased their market share by 24%. Taxing credit unions isn’t about fairness or wanting to help government raise more money. It’s about wiping out competition for the sake of profits for the greedy few.

How You Can Help

Your credit union, the Virginia Credit Union League and the national association are all working together to fight these attacks but we need your help. It’s easy and it’s very important. We also ask that you contact your elected official today and tell them to vote against any new tax on Credit Unions. Visit www.mycuisme.com for an easy-to-use e-mail system for contacting your legislator. Tell them how YOUR credit union has helped you, and how you have benefited from credit unions.