WASHINGTON – Ending credit unions' federal tax exemption would cost the country billions in lost revenue and jobs, according to a study commissioned by NAFCU and released Wednesday during the trade group's Congressional Caucus.
Research presented in a report – titled “Economic Benefits of the Credit Union Tax Exemption to Consumers, Businesses and the U.S. Economy” – found that loss of the credit union tax exemption would cost the federal government $15 billion in lost tax revenue, $148 billion in GDP, and 1.5 million lost jobs over the next decade.
- MORE Caucus coverage: California Clash Over Cash
- MORE Caucus coverage: Sen. Sanders Reaps Boos in Ryan Attack
- MORE Caucus coverage: MBL Vote Seen Unlikely This Year
- MORE Caucus coverage: CFPB Hit, Hugged at Podium
- MORE Caucus coverage: Rep. Clyburn Reassures on 'Fiscal Cliff'
- MORE Caucus coverage: Tower FCU Marketer Wins Paul Revere Award
- MORE Caucus coverage: Day 1 in Pictures
- MORE Caucus coverage: Day 2 in Pictures
- MORE Caucus coverage: Day 3 in Pictures
“This study shows how vitally important credit unions are to all Americans, not just those who are members of a credit union,” said NAFCU CEO Fred Becker. “It is clear that the benefits of the credit union tax exemption are a great boon to our overall economic welfare and prosperity and that its preservation should be of the highest priority.”
Researchers found that consumers benefited by $10 billion per year because credit unions are exempt from federal taxation and that, counter intuitively, taxing credit unions would result in a net tax loss of $1.5 billion because of the loss in consumer income from fewer credit unions in the marketplace, NAFCU said.
The study also found that bank customers benefit from credit unions as well because of increased competition keeping rates low, the trade group said.
The total cost to bank customers if there were a 50% reduction in credit union market share ranges from a low of $2.4 billion to a high $6.3 billion per year over the period 2005-2011 in higher loan rates and lower deposit rates, totaling almost $30 billion, the trade group said its research showed.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.