MI Credit Unions Get Unanimous Support from State’s Congress Members as Tax Fight Looms
Michigan’s entire congressional delegation – all 14 U.S. representatives and two senators – have unanimously voiced support for credit unions and their mission as the nonprofit financial institutions fight to stop a federal tax increase that will affect its 4.6 million Michigan members and all consumers. The show of formal congressional support was announced today by the Michigan Credit Union League and Affiliates.
"Michigan lawmakers on both sides of the aisle support what credit unions stand for," MCUL & Affiliates CEO David Adams said. "This latest universal validation of the importance of the credit union tax exemption as good public policy, is gratifying and a testament to how effectively our credit union leaders and their members are getting their message across."
The bipartisan, bicameral show of support for credit unions and their commitment to provide affordable and essential financial services to families and small businesses on Main Street America comes as Congress prepares to rewrite the federal tax code from scratch. The federal government has given credit unions and their members tax relief since 1934, relief that could be at risk with the rewrite. Then as now, credit unions operate as not-for-profits organized without capital stock and for mutual purposes of their members only – the opposite of for-profit banks.
Michigan will play an important role in any rewrite of the tax code, with three key players who sit on committees that work on tax issues. U.S. Rep. Dave Camp, R-Midland, is chairman of the House Ways and Means Committee, the House tax-writing committee; Rep. Sander Levin, D-Royal Oak, is the ranking member of Ways and Means. In the Senate, Sen. Debbie Stabenow, D-Lansing, is a member of the Finance Committee, the main tax-writing committee in that chamber.
The tax rewrite only affects federal taxes, and credit unions will continue to pay a range of other taxes. At the same time, credit unions are lending to small businesses and their members at far larger rates relative to their assets than banks, especially during the 2007-2010 financial crisis, when banks’ small-business lending actually decreased.
Americans would lose if the credit union federal income tax exemption were eliminated: 150,000 jobs would be lost per year, all consumers – credit union members and non-members – will see higher loan rates and lower deposit rates; and taxpayers would see a net loss of $15 billion over the next decade in federal income tax revenue, according to a 2012 independent study released by the National Association of Federal Credit Unions.Go to main navigation