Now does that mean that we don’t make any money? Well, of course not, most of you are paid professionals… and it’s nice to get a pencil when you’ve requisitioned it, it’s especially nice when the lights and heat come on. So, we’re not NON-PROFIT, we’re NOT-FOR-PROFIT.
Unlike other financial institutions, credit unions do not exist for the purpose of making a profit. Our focus is not on making money, but on serving our membership. Banks have stockholders who expect to receive a share of the profits. Credit union return any surplus earnings to members in order to improve services, add new services, pay dividends on shares, or to keep loan rates down All so-called “profits” or “savings” are returned to members who in turn pay personal income tax.
Because we are not-for-profit, we have a corporate tax exemption that creates issues with our for-profit banking friends. They believe that because we provide similar services we should be taxed. Well, they fail to look at our most basic difference, we exist to serve people, and they exist to make a profit. We’re a cooperative, organized as a not-for-profit, so we shouldn’t pay corporate taxes.
Also, it’s important to note that credit unions pay other kinds of taxes … we pay payroll taxes and property taxes.