What makes credit unions different?

Why is it important to support local banks and businesses?

It’s important to understand how credit union are different and unique.

Taxation
Credit unions pay taxes in the forms of sales taxes, payroll taxes, and property taxes. However, credit unions are exempt from federal income taxes. This exemption was established in 1937, affirmed by statute in 1951, and re-affirmed in 1998 in H.R. 1151, the Credit Union Membership Access Act, which states:

“Credit unions, unlike many other participants in the financial services market, are exempt from Federal and most State taxes because credit unions are member-owned, democratically operated, not-for- profit organizations generally managed by volunteer boards of directors and because they have the specified mission of meeting the credit and savings needs of consumers, especially persons of modest means.”

Not-For-Profit
Credit unions are in existence to serve their members, not to make money. Unlike other financial institutions, credit unions do not pay dividends or issue stock to stockholders.

Ownership
Members at credit unions have equal ownership, and each member has one vote. Customers are both owners and members.

Eligibility
In accordance with federal statute, credit unions can’t serve the general public. People can qualify for membership in a variety of ways including through their employer, through a church or social group, or through a community charter.

Volunteer Boards
Every credit union is governed by its own voluntary board of directors. The membership elects the board’s members.

 

Interested in becoming a member at Vantage West?

Stop by a branch or contact us to learn more.