[BankingOnYouPod] Episode 5: Don't Tax My Credit Union

Credit unions are not-for-profit financial cooperatives, and your voice is crucial in preserving the benefits that they provide. By reaching out to your elected officials, you can help ensure that credit unions remain a viable option for affordable and community-focused financial services. Together, let’s tell congress:

How You Can Help:

Visit DontTaxMyCreditUnion.org: This site provides resources and information on the importance of the credit union tax exemption.
Contact Your Representatives: Use the tools available on DontTaxMyCreditUnion.org to send a message to your U.S. Representative and Senators, urging them to oppose any efforts to tax credit unions.
Share the Message: Inform friends, family, and community members about the potential impact of taxing credit unions and encourage them to take action as well.

By acting now, you can help protect the services and benefits that credit unions offer to millions of Americans. Together, we can ensure that credit unions continue to thrive and serve our communities effectively.

Special thanks to credit union members, Andrew, Heidi, Kimberly, Michelle, Robyn, Roman, Ben, Shannon and Melissa for participating.

How to Listen:

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Banking on You is powered by West Community and Tigers Community Credit Union.

Transcript

Member 1 (Andrew)
My name is Andrew and I’ve been a member with the Credit Union a little over 10 years.

Member 2 (Heidi)
My name is Heidi and I have been a member of a credit union since 2007.

Member 3 (Kimberly)
Kimberly. I’m and I’ve been a member of West Community since 2011. My name is Michelle. I’ve been a member of a credit union for about four years.

Member 4 (Michelle)
Michelle and I’ve been a member of the credit union for about four years.

Member 5 (Robyn)
My name is Robyn. I’ve been a member of a credit union since I was a baby.

Member 6 (Roman)
Roman and my whole life, maybe like 18 years.

Member 7 (Ben)
My name’s Ben… I’ve been a member since college.

Member 8 (Shannon)
My name is Shannon, and I have been a Credit Union member since 1999.

Part of three credit unions over the last, I’d say, 10 years of my life, actually.

Member 9 (Melissa)
Melissa, and I’ve been a member for 26 years.

Host Josh Rodriguez
You might be entirely unaware, but the future of your credit union is at a crossroads. At this very moment, lawmakers in D.C. are busy working on a massive tax bill. What does your local credit union have to do with all the political wrangling and backdoor dealmaking? I’ll explain more in just a minute. But first, my name is Josh, and I have been a credit union member for 26 years. I’m your host, and this is a special episode of Banking on You.

Welcome to Banking On You, episode five, Don’t Tax My Credit Union. Credit unions are not-for-profit cooperatives. Now that’s not to be confused with nonprofits like your local charity or community organization. As a credit union, the IRS offers an income tax exemption which enables us to stay true to our mission and philosophy, which is simply helping people.

Instead of profits just lining the pockets of a small group of owners like a bank does, credit unions reinvest our earnings into our member owners and communities offering better rates, lower fees, and better services.

Robyn
My first credit card to build my credit was with a credit union and I trusted it because I knew that there wouldn’t be hidden fees, there wouldn’t be annual fees that I would have to worry about. My first auto loan was with a credit union and I was able to get it on my own at 19 because my credit union trusted me, we had a good relationship. I had direct deposit, I had a full-time job.

So the relationships that I built with credit unions along the way have been able to help me establish myself and my credit. And I was able to finally buy a home and get a mortgage through a credit union about a year ago. And that was also a wonderful process because I knew that I could trust it and its transparency.

Andrew
Lower interest rate on autos, especially auto loans. I’ve never not gone through the credit union for an auto loan. My very first one, the dealership mocked me that I was not going to get approved for one actually when I was 18 got me my first car loan without issues just because I had direct deposit and things with them. I had no co-signer, no nothing. And just because of the history I had with them, they approved me instantly.

Heidi
I’ve had a couple of loans. The rates are definitely lower than other places I’ve looked at. So it’s been really nice. The checking account doesn’t have any minimum balance. There’s no monthly fees. It’s nice.

Andrew
It’s very convenient and it’s very local feeling. I feel like I bank with my community as opposed to just being a line on a ledger at a big conglomerate organization, without naming names.

Josh
But it doesn’t just stop with affordable loan rates and reasonable service charges. Not even close. Credit unions have stepped up in times of economic distress on a large scale, helping families recover from the Great Recession of 2008-2009, or coming alongside local communities during times of widespread layoffs, factory closures, or any type of financial downturn. The COVID-19 pandemic was one of those times.

We also serve as lifelines in underserved areas traditional banks have abandoned, ensuring everyone has access to financial services focused on improving their lives, not just the bottom.

You know, this cooperative model has enabled credit unions to offer financial education, support local initiatives, and provide personalized services that big banks just can’t match.

We treat each and every member as a person and we actually listen to what they need and what their stories and are able to actually get on their level and help them because we can empathize with them and understand what they’re going through in all different areas of their finances.

The real truth that concerns me is what we do for the average American with the current debts and the current economic concerns on a daily basis. I probably am consolidating a lot of their debts and a lot of overspending because of unprepared planning and unrealistic financial terms right now. And what we’re seeing a lot of is people are eating equity out of their homes that they were paying down just to make ends meet. And at our lower interest rates were able to combat that even better for them to be able to pay back down the debt faster than they were at competitors.

Josh
Eliminating that model would lead to increased costs for members and reduced access to affordable financial services. And it would put all the great community work credit unions do at risk.

And in the last three years, I have been able to volunteer so many hours and give back to so many organizations within St. Louis. I love volunteering at the food banks and I love the drive-through food bank where people come and you get to put the groceries that you packed for them in their car and you know how it’s impacting their life.

Roman
It just feels good to be around like-minded people who enjoy helping others. And that’s like a big part of the culture. It’s important to me and I’m glad that it is reflected, like just throughout the whole like community of Tigers.

Josh
Do me a favor, go back and listen to episode one, Inspiration, to hear just how West’s Community and Tigers Community give back to the St. Louis and Columbia area communities. It’s in our blood. It’s what we do and who we are. But it’s not just Wests Community and Tigers Community. Credit unions across the United States devote time, money, and effort to better their surrounding communities. It’s what we do. It’s all part of helping people.

So let’s think for a moment. What could happen if credit unions lose their tax-exempt status? A recent economic study published by America’s Credit Unions states the following. Credit unions return $37 billion annually to members through better rates and lower fees, as we’ve already mentioned. Removing the tax exemption would force smaller credit unions to close or consolidate and existing credit unions would have to pass on additional costs to, guess who, yes, their members.

Jason Peach (CEO)
Well I think really this is not an attack on credit unions, it’s an attack on consumers. You we have 130 million members of credit unions in the United States. 130 million people who get the benefit of a credit union through pricing and services.

When that tax occurs and increases cost for those credit unions, it’s going to get passed on like anything. And that is a direct financial impact, a negative impact to consumers and to 130 million members of credit unions. Credit unions will probably have to figure out how to change their pricing to afford to pay this extra cost. People getting home loans, car loans, the fees they pay for services would all have to go up.

I mean, there’s no other way about it.

It will directly affect the amount of money we can donate to organizations. It will affect the amount of people we can hire to perform service to the community.

We study our economic impact for our members every year and we know that the value of our better pricing for our services compared to other institutions as a credit union, as a not-for-profit cooperative, we gave our members a direct financial benefit of $9.4 million last year. What’s sad is if this tax goes into place that will change the economics and my concern is that we won’t be able to afford to give that much value and that’s a direct impact to the people in our community.

Josh
Jason Peach, President, CEO, member of a credit union, 33 years.

So how can you help? What can you do to protect the tax exempt status of credit unions? Well, it’s actually quite simple. There’s three steps. Visit DontTaxMyCreditUnion.org. There you’ll find additional resources and information on the importance of the credit union tax exemption. It’s pretty easy to remember that website DontTaxMyCreditUnion.org. Just in case, we’ll include a link in the show notes. Number two, it’s also really easy to use the tools available on DontTaxMyCreditUnion.org

Send a message to your U.S. Representative and Senators. Urge them to oppose any efforts to tax credit unions. It’s a super simple process that will take you less than five minutes to complete.

Number three, share the message. Inform your friends, family, and community members about the potential impact of taxing credit unions. And encourage them to take action as well. Share this episode with them. Send them a link to DontTaxMyCreditUnion.org. Get others involved. Just three steps.

But please. Don’t delay. Act now to help protect the services and benefits that credit unions offer to millions and millions of Americans. Together, we can ensure that credit unions continue to thrive and serve our communities effectively for years to come.

Thank you so much for listening to the Banking On You podcast. Please follow us on all the socials at Banking On You pod. For show notes and additional info, visit our website, bankingonyoupodcast.com. Huge thanks to Ashley Scroggins for pretty much scripting this entire episode. You are a lifesaver. Thanks, Ashley. And also lots of thanks to the rest of our marketing team led by Kimberly Berzack, Brian Green, Lori Hudson, and Stephanie Tyler.

We got this out in record time. Couldn’t have done it without you all. Thanks, team. JD Sutter is our producer and Gandalf of sound design. Graciously enduring all of my speaking errors was our studio engineer, Dave Powell. You’re a patient man, Dave. The Banking on You podcast theme was composed by none other than Russ Whitelock. Thanks, Russ. Our executive producers are Jason Keech and Corinne Gruble.

The Banking on You podcast is powered by West Community and Tigers Community Credit Union. And I’m your host, Josh Rodriguez. Until next time, remember, we’re Banking on You.