Credit Union Advocacy
The value of credit unions
Credit unions are not-for-profit financial cooperatives. No matter the size or what services a credit union offers – its structure remains the same with a focus to serve consumers. This focus on consumers benefits the entire community and financial services, including those who are not credit union members.
Credit unions do not pay the federal income tax on profits because profits are returned back to member-owners, who pay taxes on those profits.
Credit unions DO pay taxes. Credit union members pay taxes on dividends (interest) that their accounts earn. Federal credit unions pay real property taxes, tangible personal property taxes and payroll taxes for their employees.
Credit unions are an important choice for consumers to conduct their financial services. Taxing credit unions takes this option away from consumers, and will drive up the cost of financial services for all.
Credit Unions Request to Members of Congress:
Recognize the unique role of credit unions in the financial services sector and be outspoken in their support of the credit union tax status.
Tax reform legislation should not eliminate or alter the credit union tax status.
Credit unions have disproportionately paid the price for the bad acts of big Wall Street banks. During the financial crisis, these big banks had to be bailed out by taxpayers, while financially sound credit unions were there to help their middle class members weather the storm. Despite not causing the problem, credit unions now face the same expensive regulatory burdens and this hurts Main Street.
Since 2010, credit unions have spent $1.7 billion to comply with these new regulations. That money could have otherwise benefited our members. We need your help to tell congress that regulatory burden hurts credit union members.
protecting consumers from data breaches
Data breaches are a continued and growing problem, affecting consumers and financial institutions alike. Credit unions have been hit hard with both regional and nationwide retailer data breaches. Action is needed.
Here are some facts about data breaches and how it affects credit unions and the consumers served by credit unions:
When data breaches occur, credit unions and other financial institutions bear the actual costs of the breach. This includes not only the cost of fraud, but the expenses of helping the consumer – blocking transactions, reissuing cards, increased staffing at call centers and monitoring consumer accounts.
Retailers that accept electronic payments are NOT subject to the same stringent data security standards as financial institutions under the Gramm Leach Bliley Act (GLBA).
Millions of consumers’ personal financial information has been compromised as a result of merchant data breaches, highlighting the need for retailers to fall under standards similar to GLBA.
The Target breach cost credit unions a minimum of $30.6 million, and the Home Depot breach resulted in nearly $60 million in costs. Credit unions have not been reimbursed a dime for either of these breaches.
EMV (chip and pin) cards will not prevent all data breaches. It is a tool, but not the save-all solution. (For example, the Target breach would not have been prevented by using EMV technology.) The most effective option is making sure all parties involved in electronic payments systems are held to the same standards to protect consumer data.