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The Credit Union Difference


Iowa bankers are once again attacking credit unions’ tax status. For decades, state and federal policymakers have taxed credit unions differently than banks because we are not-for-profit financial cooperatives that exist to serve our members, not to make a profit. Credit unions’ tax status has never been based on our size or the number of services we offer.

Our response to the credit union tax status: Structure is the Basis for Tax Difference
  • Credit unions are not-for-profit financial cooperatives. We exist to serve our members, not to make a profit. Banks are for-profit institutions that return profits to a select group of stockholders.
  • Credit unions are democratically-controlled institutions. Each member has equal ownership in the credit union and has one vote in electing the board of directors—regardless of how much money he/she has on deposit. Banks are controlled by the limited number of stockholders that own the institution.
  • Credit unions’ boards of directors are volunteers, elected by and from the membership. Banks’ boards are elected by the stockholders and are compensated.

Credit Unions Pay Taxes

  • Credit unions do pay taxes – payroll taxes, sales taxes, and property taxes. State chartered credit unions also pay a monies and credits tax on their reserves.
  • Our cooperative structure and tax treatment is benefitting Iowans’ pocketbooks. Credit Union members saved $104 million last year by receiving better rates on loans and lower fees at their credit union versus what they would have received at a bank.

Banks Dominate Market Share- It is an Unlevel Playing Field but not in our favor.

  • Credit unions control approximately 12% of the financial assets in Iowa. Banks control over 88% of the state’s financial assets.
  • If Iowa Banks think credit unions have it so good, why don’t they convert to be a credit union?
    • Answer: They’ll never do it. Banks would have to give shareholder profits to all members, endure restrictions on business lending and secondary capital and, instead, share their success with member-owners – like credit unions.

Contact your Legislator!

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