Below is an excerpt from an opinion piece written by Peg Scott and Brad Winterbottom for the Des Moines Register.
Many things start with good intentions. But as time passes and institutions evolve, even the best of intentions can produce unintended results.
Credit unions were formed with good intentions — to help individuals of modest means, who share a meaningful common bond, gain access to credit. For some credit unions, this tax-exempt mission remains. But Iowa’s largest credit unions instead are investing member resources in more profitable commercial lending and wealth management business lines. And, by declaring the whole state of Iowa as their field of membership, their growing tax subsidy is hurting the very Iowa families they initially set out to help.
The University of Iowa Community Credit Union and Veridian Credit Union netted more than $125 million in profits last year, an increase of nearly $19 million over 2017. Together, UICCU and Veridian made more money than the rest of Iowa’s credit unions combined. Not too shabby, and all of it was income-tax-free.
That’s right, these big credit unions continue to pay no state or federal income taxes even as their profits grow at double-digit rates. Contrast that with the income tax that average Iowans will pay on their modest cost-of-living salary increases this year, all while our state lawmakers continue to look for ways to fund improvements in education, health care, infrastructure, and water quality.
Read more in the Des Moines Register.