Credit unions taking preemptive strikes against possible tax changes
Credit unions across the country and in Pennsylvania have joined in the “Don't Tax My Credit Union” campaign to keep the federal government from stripping them of their tax-exempt status.
While credit unions aren't in danger yet of losing that status, discussions in Washington, D.C., to revamp the tax system could leave many nonprofits in danger.
Michael Wishnow, senior vice president of communications and marketing at the Pennsylvania Credit Union Association, said tax reform talks have included a "blank sheet of paper" where nonprofits would have to prove their worthiness of tax exemption.
"When we do talk to our friends in both the House and Senate, we do get verbal reassurance that it wouldn't happen," Wishnow said. "They understand how important credit unions are. But they also tell us, 'If there is that blank sheet of paper, you guys have to be heard.' That's where the campaign comes from."
While legislators have not singled out credit unions specifically, Wishnow said it's always possible they can be targeted for future taxes.
That mere possibility led credit unions to use a social media campaign to make sure members are aware of what could be coming in the future.
The result has been about 25,000 letters written to Pennsylvania senators Bob Casey and Pat Toomey and the state's congressmen in two months of the campaign, Wishnow said. Nationwide, he said, it's about 500,000 letters written. By the time the House and Senate come back from their summer break, Wishnow said, the PCUA likely will have met with all of the Pennsylvania representatives. It's already met with Casey and has a meeting scheduled with Toomey.
Credit unions differ from banks in that they are owned by their members and can provide lower fees and loan rates because of their nonprofit status.
It's estimated the loss of nonprofit status for credit unions would cost Pennsylvania's 499 credit unions about $226 million in, Wishnow said, but there is no estimate on what the mean value would be for individual institutions.