To the Editor:
In reference to the recent “Not right” letter about the credit union tax status, it’s important to point out that credit unions are exempt from income tax simply because they are not-for-profits owned by the members of the credit union.
SIU Credit Union has served our member owners who live and work in southern Illinois for more than 80 years and is committed to giving back to our community. The disingenuous, broad claim that credit unions don’t pay taxes serves no purpose in advancing the conversation on real issues facing our state. Illinois credit unions pay millions of dollars each year in payroll, property, sales, and other state and local community taxes. Our members also pay tax on the interest and dividend income they receive. An income tax on SIU Credit Union would double tax our owners.
The very same credit union tax status that is coming under attack is responsible for $16.4 billion in consumer benefits including higher savings, lower rates and fewer fees in 2018 alone, a number vastly larger than any supposed “benefit” that would come with taxing credit unions. It is our model and structure that enables us to offer these benefits to our member owners, the industrious working families of Illinois. This is the reason for our tax status and you only have to talk to our members to find out how this benefits the community we serve.
The letter compares banks to credit unions and complains about the unfair advantage enjoyed by credit unions. If that were true, we would see banks becoming credit unions. Banks operating in Illinois control more than 92% of the deposits in the state. With that dominant position, banks chartered in Illinois are doing more than fine, with a record $5.3 billion in net income and a record $2.7 billion in stockholder dividends in 2018. Banks are welcome to change charters and join us as a not-for-profit financial cooperative to experience the “so-called” competitive advantage that credit unions enjoy. All working families in Illinois would certainly benefit from that move.
SIU Credit Union