Losing Tax Exemption Wouldn't Kill Us

I agree with Rob Nicholls, CEO of Australian National Credit Union, who sees no contradiction between the social goals of credit unions and the “social responsibility of paying taxes” as stated in the Aug. 31 issue. He goes on to say that “American tax payers are subsidizing credit union members”. I have long believed that the original logic of a credit union tax exemption has expired, and that credit unions, like other business cooperatives in the United States, should pay their fair share. Indeed, at a time when the Federal government is talking about spending multi-billions of dollars to rebuild cities on the Gulf coast and at the same time funding a very expensive campaign in Iraq, any American citizen or business hanging on to a questionable tax exemption is acting irresponsibly. The tax exemption that we enjoy does not make us a credit union; member ownership makes us a credit union. I disagree with CUNA’s Bill Hampel who, in the same article, says that credit union taxation would reduce capital; It would reduce the rate of growth of capital which credit union managers would have to address in their ALM planning. I call upon the leaders of our industry to take the bold step of offering to give up our Federal income tax exemption in exchange for increased credit union powers, and to encourage Congress to take whatever other measures are necessary to move towards a balanced Federal budget. We might then be seen as heroes rather than continually having to defend ourselves against criticism from banks and others. Rick Leas President/CEO Golden Bay Federal Credit Union Moffeft Field, Calif.