Why Credit Unions Are Tax-Exempt
Here are just a few reasons • Credit unions are not-for-profit, democratic, financial cooperatives, owned by their members. • Credit unions’ boards of directors serve as unpaid volunteers, elected by members. • Credit unions, with limitations on who they can serve and restrictions on products and services, also have a social mission to provide service to people of modest means as part of their member base. CUs Are Different • Credit unions were created to provide financial services in a democratic, not-for-profit, cooperative manner–that is, with member ownership and control. Those characteristics are the foundation of the tax exemption. Early in the history of credit unions, the U.S. attorney general declared state-chartered credit unions exempt from federal income taxes because they were “organized and operated for mutual purposes [in which an organization’s members share in the profits and expenses] and without profits.” Later on, in the 1930s, legislators passed a law to exempt fe
