A Message From Truliant President and CEO, Marc Schaefer. This message originally appeared in our Fall 2017 Quarterly Newsletter.
Admit it. You’ve been hooked into diverting from an online article that you needed to read to a juicy “You’ll Be Amazed at the Net Worth of These Canine and Feline Actors” or the favorite schadenfreude, “These Stars Are Living in Their Cars and Cardboard Boxes in the Streets of L.A.” You’re in five deep and can’t remember the original article that you were reading.
Well here are some shocking facts about credit unions like Truliant.
Myth 1: Credit Unions Don't Pay Taxes
The all-time favorite of course is that credit unions don’t pay taxes. In fact, credit unions like Truliant pay property taxes (which fund our counties and our schools), payroll taxes, and a variety of other business taxes. Most notably, our members pay taxes when we pay dividends (or interest) on any of their accounts – not unlike the structure of Subchapter S banks who also pay no corporate income tax. We do not pay a for-profit corporate income tax because we are not a for-profit corporation.
Changing the credit union tax status would actually cost the government somewhere north of $38 billion over the next 10 years, reduce GDP by over $140 billion and cause the loss of approximately 900,000 jobs.*
Myth 2: Credit Unions Don't Have to Comply With the Same Regulations
A close second is that credit unions don’t have to comply with the same regulations. Credit unions have exactly the same regulations as our bank counterparts, even when our ownership structure and history would make that seem unnecessary. Truliant at $2 billion in asset size has to follow the exact same regulations to make a mortgage for our member as JP Morgan Chase at over $2 trillion in assets.
The only exception is the Community Reinvestment Act (CRA)
. Banks were taking their deposits from one community and investing in other communities (e.g. rust belt community to Florida resort). Credit unions are the community. They didn’t engage in the practice and Congress exempted them.
Myth 3: Credit Unions Can't Keep Up With Today's Technology
Another fan favorite is that credit unions are not able to keep up with the technology needed to serve the consumer — particularly millennials who demand advanced digital access. The truth is, credit unions like Truliant have some of the best-in-class technology available
Whether it be biometric optical sign-on or our state-of-the-art mobile banking applications, remote smart device deposits, digital loan and membership application, advanced alerts or pin-less mobile account information access, we have technology as good as or better than the large banks. We collaborate with each other and third-party business partners to create the scale we need to compete.
Myth 4: I Can't Become a Member
Many consumers like credit unions as an option, but believe “I can’t open an account at a credit union unless I work for a large company.” In fact, if you live in North Carolina, chances are you can open an account
In addition to providing credit union service to the employees of over 1,200 companies, Truliant may serve anyone who lives or works roughly within the geography of 25 counties reaching as far east as Chapel Hill, west to Hickory, north to the Virginia border and south to Greenville, South Carolina.
Myth 5: Credit Unions Are Only for the Economically Disadvantaged
Even knowledgeable friends of credit unions will fall prey to their nostalgic belief that credit unions were intended to be small and mostly serve the economically less fortunate. While we do provide more affordable services and many have a majority of moderate-income households as members, credit unions were not created to be or destined to be “small” any more than banks or supermarkets were.
They were never meant to serve only the very poor, as that model would not allow credit unions to affordably serve so many households of low-, modest- and middle-income means. They are simply consumers and small business owners who choose to own their own financial institution that has their best interests at heart.
Credit unions in the 21st century are what consumers and citizens want them to be: a refreshing alternative or option to personal and small-business banking.
One in which, they can have a say through a democratically elected Board of volunteer members and see their reward in better rates and fees and thoughtful guidance in their own best interests.
That is if they can break away long enough from the online article on “Five Mysterious Disappearances of Celebrities during Octoberfest in Munich.”
*Economic Benefit of the Credit Union Tax Exemption to Consumers, Businesses and the U.S. Economy - January 2017, Robert M. Feinberg Ph.D., American University. Douglas Meade Ph.D., IERF Inc.