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Retiring Oklahoma Senator Calls for Elimination of CU Tax Exemption
Wednesday, December 10, 2014 7:00 AM

Retiring Sen. Tom Coburn (R-OK), who has less than a month remaining in office, just released a report that he says "decodes" the U.S. tax code. In it, Coburn calls for the elimination of the credit union tax status, which applies to credit unions because of their cooperative, not-for-profit operating model.

Credit Union National Association President/CEO Jim Nussle said of the report, "Sen. Coburn has had a distinguished career in the Senate, but I have to take issue with his view of the credit union tax status:  He's just wrong and uninformed."

Nussle emphasized that Coburn's suggestion would impose a new and unjustified tax on financial cooperatives, and he warned that Coburn's report also reveals "little understanding of how credit unions differ from banks."

"Because of the cooperative ownership structure," he said, "any excess earnings of a credit union are redirected back to all members in the form of lower loan interest rates and higher savings yields. And credit unions deliver." Nussle adds, "CUNA's research shows credit union members in the year ended June 2014 realized financial benefits of nearly $6 billion, just by saving at, borrowing from, or acquiring other financial services from their credit unions, rather than from a bank."

Nussle pointed out that for the seventh year in a row, in 2014 credit unions were tops in customer satisfaction among financial institutions, beating out the banks.