In an op-ed in the Charlotte Observer last week, Yael Ossowski, deputy director of the Consumer Choice Center — a D.C.-area consumer advocacy group — called on the Trump administration and Congress to take steps to eliminate the credit union tax exemption as part of the broader plan to reform the U.S. tax code.
“During the Great Depression, Congress exempted credit unions from taxes in the hopes that encouraging customer-owned neighborhood savings and loan clubs would replace failed banks in underserved areas,” Ossowski wrote. “Back then, it made sense to allow credit unions to operate as nonprofits. Now, it’s beyond time to end it.”
He added that “while banks are slapped with an average tax rate of nearly 30 percent, credit unions aren’t taxed a dime on the money they make,” which has created an unlevel laying field for banks. “The banking industry that is the lifeblood of the North Carolina economy gets stuck with massive tax bills while credit unions are showered with corporate welfare. That comes courtesy of Congress and American taxpayers. There is no reason these monster financial institutions should enjoy the same tax-free status as soup kitchens, Goodwill and disaster relief charities.”