A Message From Our CEO | Summit Credit Union

Credit unions make us stronger. In fact, 89% of members nationwide say their credit union has improved their financial well-being. But there’s a threat to credit unions – some want to change our tax-exempt status, which would negatively affect our ability to serve our communities. Learn the facts and then to help protect credit unions and the vital resources we provide.

1. Member owned. If you’re a Summit member, you're a credit union owner. That means a share of profits is returned to you. Credit unions do not issue stock, do not pay dividends to outside investors, and reinvest earnings directly into our member benefits. Credit union members are equal owners, regardless of how much money they have in the credit union. Banks are owned by stockholders, who do not have to be customers.

2. Democratically governed. Every credit union member has a voice. This is vastly different than stock-owned banks where customers, if they do not own stock, have no say in decisions; if you do own stock, your vote is weighted by the number of shares you own. Every credit union member gets one vote – and can vote on things like who serves on the board of directors, mergers or name changes. Most credit union board members serve as unpaid volunteers, where banks have paid directors.

3. Not-for-profit, which means we serve communities, not corporate interests. Without stockholders demanding a market return on their investment – like banks – member-owners get lower loan interest rates, higher savings yields, fewer/ lower fees and more.

4. “People helping people” mission. Credit unions have made a positive impact on the communities they serve since before the Great Depression. People overwhelmingly support credit unions because they know their financial well-being comes first. At Summit, we work with members to provide solutions during hard financial times and offer free financial education programs to equip folks with healthy financial habits.

Credit Unions by the Numbers

Credit Union Tax Status Impact

Credit unions’ federal tax status allows credit unions like Summit to provide safe and affordable financial services to people from all walks of life. In addition to the structural differences and fundamental ways we operate, credit unions do not pay income taxes because the money we earn goes into reserves. Reserves are used for capital/safety and soundness money for a rainy day, which we need to maintain a certain level. Earnings are also put back into the credit union for increased member services, security, technology investments, employee raises and benefits, branch deployment and more.

For non-members, credit unions provide options and a needed check-and-balance on for-profit financial institutions, giving people access to more consumer-friendly prices.

Here’s the Truth: Credit Unions Do Pay Taxes

While credit unions don’t pay corporate income taxes, we DO pay a host of other federal and state taxes. Credit unions accounted for roughly $23 billion in federal taxes in 2023, along with $13 billion in state and local taxes. Beyond that, credit unions also invest in their communities, support small businesses and help local economies grow.

What’s at Risk?

Congress granted this tax status to support and sustain a system designed to serve everyone including the underserved and working families. Removing it would threaten the survival of the nation’s 4,500 credit unions, erode the financial well-being of millions of credit union members nationwide, and impact the broader benefits credit unions provide to their communities and consumers overall.

Take Action!

Any new tax on credit unions is a tax on the more than 140 million credit union member-owners, including the many teachers, police, firefighters, small business owners, veterans, soldiers and sailors served by our nation’s credit unions. - to urge Congress to oppose any new taxes on credit unions, and to preserve and protect credit union tax status.