Credit unions are quasi-socialist organizations that are exempt from Federal income taxes. They used to justify that exemption based on limiting customer base. Membership is wide open now and there is no justification for the exemption other than the politics of the labor movement. If they are going to be free to conduct full blown banking business, they should not be subsidized by the tax exemption because it gives them a competitive advantage over other financial institutions.
Does this flow through to mean reduced fees / rates for customers? If so, then this conservative is all for it.
Come to think of it, maybe eliminating corporate taxes really might benefit the customers, eh?
There are huge swaths of business that CU’s are not allowed to participate in.
They are also exempt from the Community Reinvestment Act.
Membership is wide open now and there is no justification for the exemption other than the politics of the labor movement.
Wrong. Membership is still limited.
I can open an account at a community bank in Oregon or Alabama, even though I reside in Virginia, but I can not acquire membership at a local credit union in either of those two states.
If they are going to be free to conduct full blown banking business, they should not be subsidized by the tax exemption because it gives them a competitive advantage over other financial institutions.
Organizations do not pay taxes. Individuals pay taxes.
Bank customers pay taxes on interest income that the commercial bank has already paid taxes on.
Plus...let's not forget the Community Reinvestment Act, in which the government forces banks to give money to poor people.
The answer is never more taxes and more regulation. Frankly, I'm surprised to see a FReeper like you advocating such a Socialist "solution"...do you work for a bank, by any chance?
Credit unions are a good thing! They almost always have fewer fees, lower interest rates on loans and higher interest rates on deposits. Credit unions have members, not customers.
Truth in Commenting Disclosure:
+I work for a large military credit union.