I’ve heard back from representatives of both credit unions and banks concerning an article that appeared last Sunday. In that piece, readers heard form both Brian Vance, President and CEO of Olympia-based Heritage Financial Corp. and Heritage Bank, and from Phil Jones, president and CEO of Harborstone Credit Union.
So that there’s no confusion on any of the complex points made in the story, I spoke today with Linda Jekel, director of credit unions for the state Department of Financial Institutions.
On taxation: Whether federally chartered or chartered by the state, credit unions in Washington are exempt from federal income taxes. Both charters are also exempt from B&O taxes. Those with a federal charter are exempt from state sales tax and state use tax, but those with a state charter do pay state sales tax and state use tax. Both pay payroll and property taxes.
On membership: The “field of membership” in a credit union can be based on where a person lives, associations or employment. A credit union may require each criterion, two, or one. For example, a person might be eligible for membership if he or she lives in a certain school district, or belongs to a certain affinity association, or works for a certain company.
The debate between the two types of institutions will likely continue, especially as credit unions seek legislation to broaden their capital base and extend their ability in commercial lending.
Let Jekel have the last word today: “I think it’s healthy to have the competition between credit unions and banks, The winners are the consumers of the state of Washington. I would hate to see either of them gone. Both serve the interests of consumers.”