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March 12, 2025,
Dear Member,
Defend your credit union's tax status: It's all about you!
At Sierra Central Credit Union, we work hard to provide unique advantages to the everyday consumer. One of those advantages offers more favorable pricing than can be found at national banks on Wall Street.
For you, this means:
- Lower loan rates
- Higher rates on savings
- Fewer and lower fees
- Free financial counseling
- Personalized service at branches and call centers
Providing top-tier financial products is a recognition of our core mission: to serve you, our member-owners (not stockholders). Because Sierra Central Credit Union is not driven by profit, like traditional banks, we can focus on providing the best possible financial services to our members.
Unfortunately, Congress may leverage a new tax on all credit unions, including Sierra Central Credit Union. Leaders in Congress are meeting to determine how to pay for the extension of the Tax Cuts and Jobs Act (TCJA). Recently, the House Budget Committee passed a resolution to begin the process for tax reform. Congressmembers will review every opportunity to reduce the deficit “price tag” that accompanies extension of the TCJA.
To send a clear message to your Member of Congress, please click this link to Connect for the Cause, and click on the Don’t Tax My Credit Union banner, located at the top of the page, to use our credit union movement’s Connect for the Cause platform. It only takes one minute and is the most direct, powerful way to ensure Sierra Central Credit Union can continue serving you.
Unique role of our credit union tax status:
This tax exemption plays a crucial role in our ability to offer competitive loan and deposit rates, often lower or non-existent fees, and a wide array of valuable products and services. The money saved through this exemption is reinvested directly back into the credit union, allowing us to improve our offerings and better serve your financial needs. It’s a critical reason why we can provide such excellent value.
The assertion that credit unions “don't pay taxes” is a half-truth. While they don’t pay federal income tax, they do pay other taxes: property, payroll, business license fees, and (for state-chartered credit unions) sales tax. Opponents often obscure this difference, hoping you’ll miss the distinction between “no taxes” and “no income tax,” knowing full well credit unions pay other taxes.
Opponents also falsely equate credit union tax status with charities like the Girl Scouts and churches. While neither typically pays income tax, their exemptions fall under different IRS categories — 501(c)(1) or 501(c)(14) versus 501(c)(3) — reflecting distinct justifications. The notion that only charities should be tax-exempt is incorrect. Many other organizations, including some banks, benefit from various tax exemptions.
Finally, credit unions like Sierra Central Credit Union serve communities with lower household incomes. In fact, Sierra Central Credit Union was assigned a low-income credit union designation, which is designed to provide greater operational flexibility to better serve lower income communities. This is possible because credit unions are chartered as not-for-profit financial cooperatives to better serve the needs of consumers and their communities.
Make your voice heard: Don’t tax my credit union.
Simply put, our tax status empowers us to prioritize your financial wellbeing. We’re proud to be a member-owned cooperative, and we’re committed to using our resources to benefit you, our most important asset.
Please Connect for the Cause today!
Sincerely,
Ron Sweeney
President & CEO
Sierra Central Credit Union
rsweeney@sccu4u.com
