Paid Editorial Feature – The views expressed do not necessarily reflect the views of the Jackson Parish Journal
By Steve Webb, Board Chair, Louisiana Credit Union Association; CEO, Neighbors Federal Credit Union
Recent commentary suggesting that credit unions are “draining” Louisiana communities misses the larger truth: credit unions are not a burden on our state; they are one of Louisiana’s greatest assets.
Credit unions do pay taxes
Contrary to common misconceptions, credit unions are not tax-free. Louisiana’s credit unions collectively paid more than $100 million in state and federal taxes last year alone. We contribute through property taxes, payroll taxes, sales taxes, and more. The only tax credit unions are exempt from is income tax on profits because those “profits” are returned to the people who own us: our members and not distributed to wealthy shareholders.
Banks, by contrast, enjoy their own tax advantages. Many organize as Subchapter S corporations (45 in Louisiana), which allows them to avoid paying corporate income tax at the entity level. To single out credit unions for their long-established tax status while ignoring these bank exemptions presents an incomplete picture. Congress has debated the credit union tax exemption many times (most recently a few months ago) and they have agreed that credit unions should be allowed this tax exemption.
Member-owned means community-focused
Credit unions exist to serve members, not outside investors. Every dollar earned is reinvested in the form of lower fees, higher savings rates, and more affordable loans. Those benefits stay in Louisiana households and small businesses, circulating back into the local economy.
Preserving access where banks leave gaps
The decline in community banks has been stark: nearly half have disappeared nationwide over the last two decades. When banks consolidate or sell to out-of-state institutions, resources often leave the community. Shareholders of a bank have the ultimate decision on which institution they would like to sell to. When a bank sells to a credit union, it’s not a loss; it’s a commitment to ensuring residents continue to have a locally governed institution focused on people, not profits.
Growth doesn’t change our mission
Some critics argue that credit unions have grown too large for their tax status. But size does not change structure. A credit union with 500 members and one with 500,000 members share the same cooperative foundation: not-for-profit, member-owned, and community-driven. Growth simply enables us to provide modern services and compete in a marketplace dominated by trillion-dollar megabanks.
The real bottom line
The real story is simple: when credit unions succeed, Louisiana families succeed. We help people buy homes, send kids to college, start small businesses, and build savings. That is exactly why Congress created credit unions in the first place.
Far from draining our communities, credit unions preserve their strength. We keep financial decision-making local, return millions of dollars in value to members, and invest in the places we call home. That’s not a loss for Louisiana; it’s a win.
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