Bellco Credit Union doesn't have to pay unrelated business income tax on its income from credit insurance or on royalties from accidental death and dismemberment insurance.
On a technicality, the credit union will have to pay UBIT on income derived from credit insurance sales via the Credit Union Indirect Lending Association, a federal judge ruled on April 2.
"In the banking and credit union context, the concept of thrift is tied to sound financial management…. Credit insurance does just that…. For a relatively marginal payment, the borrower buys peace of mind," U.S. District Judge Christine Arguello wrote.
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