In reference to the recent article “Voice of the People" letter about the credit union tax status, it's important to point out that credit unions are exempt from income tax simply because they are not-for-profits owned by the members of the credit union.

At 2 Rivers Area Credit Union, those owners live or work in Kankakee, Will and Iroquois Counties or are an employee (or family member) of Shapiro Center, Illinois Veterans in Manteno or the Fox Development Center. And we do pay taxes to the state and local community. In fact, Illinois credit unions pay millions of dollars each year in payroll, property, sales, and other taxes.

Our members also pay tax on the interest and dividend income they receive and an income tax on 2 Rivers would double tax our owners.

I've been involved with credit unions for more than 40 years and have always heard the argument that credit unions have this unfair advantage because of their tax status. In all that time, though, I've never heard of a bank deciding it was such a competitive advantage that they became a credit union. This is because the shareholders of for-profit-banks want to make money on their investment, which is perfectly fine for them. It also must be a good business model, since banks operating in Illinois control more than 92% of the deposits in the state.

With that dominant position, banks chartered in Illinois are doing more than fine, with a record $5.3 billion in net income and a record $2.7 billion in stockholder dividends in 2018.

While we may offer a number of the same products as banks, our model and structure are very different, with owners benefiting from lower loan rates and fees that a credit union can offer because of its not-for-profit, cooperative structure. This is the reason for our tax status and you only have to talk to our members to find out how this benefits the community we serve.

As for banks that frequently carp about the tremendous competitive advantage that credit unions enjoy, they are more than welcome to change charters and join us a not-for-profit financial cooperative!

Danita Swanson, President/CEO

2 Rivers Area Credit Union

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