Credit unions were originally created to serve low-income and rural households. That is why they don’t pay federal taxes and are exempt from filing an Internal Revenue Service Form 990, unlike other nonreligious, nonprofit organizations.
But today, credit unions have become one of the fastest-growing segments of the banking sector, gobbling up for-profit community banks left and right. These new behemoths are using their tax subsidy to distort financial markets, evade transparency, and consolidate the banking sector, all while failing to deliver on their original mission. It is time to end the tax subsidy for credit unions.
When former President Franklin D. Roosevelt signed the Credit Union Act of 1934, the idea was that by giving these new entities nonprofit organization status, the federal government could
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