Protecting the Credit Union Tax Model

Leigh Brady

Hi, I'm Leigh Brady, President and CEO of State Employees’ Credit Union.

Dan Schline

And I'm Dan Schline, President and CEO of the Carolinas Credit Union League. Today, we want to talk to you about our credit union business model and how it produces positive outcomes for millions of North Carolinians every day.

Leigh Brady

But more specifically, our tax status and how it has been central to our ability at State Employees’ Credit Union to deliver the greatest possible value to our members for over 87 years.

Dan Schline

While banks and credit unions provide some of the same services, credit unions operate in a fundamentally different manner. We have a different business model. Credit unions are not-for-profit cooperatives governed by a volunteer Board of Directors, and we're owned by our members. Credit unions are designed to return value to their members, not Wall Street. That means instead of profits going to shareholders, like at a for-profit bank, credit unions return earnings to our members.

Leigh Brady

Yes, earnings are returned to them through more competitive deposit and lending rates and low- or no-fee services. In fact, in the last few years alone, SECU has eliminated several fees, ranging from stop payment to returned check. SECU ranks the third-lowest for annual fee income per member among its credit union peers, resulting in millions of dollars in fees that stayed in our members’ pockets where they needed it most.

Dan Schline

As not-for-profits that return earnings to their members, credit unions are exempt from federal corporate income tax. This is crucial to our cooperative model, but this model is now under attack. Some members of Congress are pushing to eliminate the credit union tax exemption. Let's be clear: Eliminating the federal corporate income tax exemption for credit unions would fundamentally change how credit unions operate.

Leigh Brady

The impact at SECU would be significant. SECU operates 275 branches and nearly 1,100 Cashpoints ATMs covering all 100 North Carolina counties. While many banks have been closing branches across rural parts of North Carolina to pad their bottom line over the past several years, we are purposefully maintaining our in-person branch network. But eliminating the credit union tax exemption could hurt the financial well-being and economic opportunity for SECU’s more than 2.8 million members.

Leigh Brady

It could also diminish our ability to continue providing financial support for North Carolina communities at-large through SECU and our member-funded SECU Foundation. To date, the Foundation has committed over $300 million in grants, loans, and scholarships for the people of our state. Last, hiking taxes on credit unions would jeopardize our ability to continue offering our members the competitive rates they deserve.

Leigh Brady

Make no mistake, a tax on credit unions would be a tax on YOU, the members.

Dan Schline

It's not just SECU that will be impacted, but all credit unions and the nearly 140 million credit union members across the United States.

Leigh Brady

So what can we do? Well, this is where you come in. It's time to stand up and make our collective voice heard. We need a grassroots campaign to tell Congress, “Don't tax my credit union.”

Dan Schline

That's right. Now is the time to act. And we need your help. We need each and every credit union employee, volunteer, and member to send an email and tell Congress, “Don't tax my credit union.” The process couldn't be easier. Simply visit: Don't Tax My Credit Union and select Take Action. The system will help you send an email directly to your senators and your local members of the House of Representatives.

Leigh Brady

Thanks for watching and don't forget to share this video with your friends and family. Together we can make a real difference.