Leading into this week’s legislative victory on the tax bill that was considered by the U.S. House Ways and Means Committee on Capitol Hill, a recent ABC-7 Los Angeles story brought attention to the move in Congress that could dramatically alter the landscape for credit unions and their members.
The broadcast segment spotlighted Stephanie Cuevas, senior vice president of federal government affairs for the California Credit Union League and Nevada’s Credit Unions, as well as the nationwide “Don’t Tax My Credit Union” campaign.
The ABC-7 Los Angeles article and broadcast interview highlights the fact that for decades, credit unions have operated with a tax-exempt status, a key factor allowing them to offer more favorable rates on loans and savings to communities across the state. As part of proposed tax reform, it points out that the industry’s nearly 90-year-old exemption is on the table for potential removal.
The ABC-7 reporter notes in the story that this move is being considered as a way to generate federal funds, but credit union leaders and advocates warn it could have serious consequences. This would potentially force credit unions to raise costs for members, impacting underserved communities, and even leading to some closures, the segment states.
Also, Eagle Community CU CEO Michael Kim was interviewed and given the opportunity to share how changing credit unions’ tax exemption would have a “significant impact” on how it does business, especially in service to underserved communities left behind by banks.
The story highlights the potential shift from a model of competition between for-profit banks and not-for-profit credit unions to one where credit unions face a significant new tax burden. With a key committee meeting on the horizon, which happened mid-week, the future of credit unions’ tax status is a developing story worth watching closely for its potential impact on local consumers’ wallets and budgets, the story states.
The interview with Cuevas briefs readers and listeners on:
