Should Credit Unions Have to Pay Income Tax?

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**Ensis Ferrae**

Alfndrate wrote:

haha I was talking more about the gak that started our whole recession thing, but you're correct as well .

The repeal of the Banking Act of 1933 was much more responsible for that than the banks by themselves (it was the law that forced separation of investment banks and commercial banks, and was viewed as one of the major factors in American growth throughout WW2 and into the 60s and early 70s).

**sebster**

Ensis Ferrae wrote:
The repeal of the Banking Act of 1933 was much more responsible for that than the banks by themselves (it was the law that forced separation of investment banks and commercial banks, and was viewed as one of the major factors in American growth throughout WW2 and into the 60s and early 70s).

That argument never really made a lot sense. It's like if I told my kid 'don't walk home down Main Street, because I know you'll be tempted to go in to the candy store, and you'll buy so much candy that it will ruin your dinner and you'll feel sick'. Then after a year I trust my kid some more and say it's okay to walk down Main Street because I think you've got the restraint to avoid the candy store. Then sure enough, he goes straight in to that candy store, buys too much candy, ruins his appetite for dinner and gets an upset stomach.

At which point the little turd turns to me and says 'it's your fault because you used to forbid me walking past the candy store, but then you trusted me and that's why I caved in to temptation'.

I mean, yeah, the restraint on banks should never have been removed, but once it was, it was the banks who engaged in excessively risky behaviour.

**reds8n**

http://www.bbc.co.uk/news/business-23433955

The Archbishop of Canterbury has warned the online lender Wonga that the Church of England plans to force it out of business - by competing against it.

The Most Rev Justin Welby told Wonga boss Errol Damelin the Church planned to do this by expanding credit unions as an alternative to payday lenders.

The plan is to create "credit unions that are both engaged in their communities", he said.

Mr Damelin said he was "all for better consumer choice".

'Took it well'
Payday firms offer short-term loans, often at high interest rates, and have been accused of leading people into more debt.

Archbishop Welby, a former financier who sits on the Parliamentary Commission on Banking Standards, has previously lobbied for a cap on high interest rates charged by loan companies.

He said the Church could do more to help non-profit lenders to compete with payday firms.

"I've met the head of Wonga, and we had a very good conversation," the archbishop told Total Politics magazine.

"I said to him quite bluntly that 'we're not in the business of trying to legislate you out of existence; we're trying to compete you out of existence'."

He said of Mr Damelin's response: "He's a businessman; he took that well."

Mr Damelin later said: "There is mutual respect, some differing opinions and a meeting of minds on many big issues.

"On the competition point, we always welcome fresh approaches that give people a fuller set of alternatives to solve their financial challenges. I'm all for better consumer choice."

New unions
Earlier this month, Archbishop Welby launched a new credit union aimed at clergy and church staff. Credit unions charge their members low rates of interest to borrow money.

BBC religious affairs correspondent Robert Pigott said the archbishop's plan was to go to some of the 500 independent loan companies and say to them, "We will help you by letting you have access to our buildings and expertise".

Our correspondent said the Church would not run the companies but would help them and allow them to work on its premises.

"I think the archbishop would see this as a social good countering a social evil," he said.

He also said it was quite possible that in future people could go to church when they needed to borrow money.

"Churches are already being used as libraries and shops and post offices. It's part of a wider trend for churches to try and become more relevant to people's everyday lives."

Charities such as Christians Against Poverty already use church premises to offer debt counselling to those in difficulty.

'Irresponsible lending'
In April the government announced an investment of £38m in credit unions, to help them offer an alternative to pay-day lenders.

Wonga has said it charges about 1% a day on its consumer loans, which are short term, and for small amounts.

An investigation into the payday loan industry by its regulator found widespread irresponsible lending earlier this year.

The industry, worth £2bn, was later referred to the Competition Commission by the Office of Fair Trading.

At an industry summit in Whitehall last month lenders were told they could face tighter controls, including limits on the number of loans that can be taken out and a cap on the total cost of credit.

The measures will be considered by the Financial Conduct Authority, which formally takes over regulation of the industry from next April.

Credit Unions - an alternative?

There are about 400 credit unions in England, Scotland and Wales
More than a million people use them - with a total of £807m saved and £627m given in loans as of the end of 2012
The government is planning to extend the interest rate that can be charged by credit unions from 2% a month to 3% a month (26.8% APR to 42.6% APR)
It wants to double the membership of credit unions to challenge payday lenders
Payday lenders offer small, temporary loans, but credit unions make a loss on loans of less than £1,000 owing to the administration costs involved, says think tank Civitas

**Frazzled**

Of course they should. All corps should have to pay income tax (or none would be better).

Inversely all personal income (including cap gains and distirbutions) should be taxed at the same rate.

**Andrew1975**

Frazzled wrote:
Of course they should. All corps should have to pay income tax (or none would be better).

Inversely all personal income (including cap gains and distirbutions) should be taxed at the same rate.

Right, which is what happens. Credit Unions are basically non profit, in that all profits are redistributed to members. Credit Unions have no profits to tax as they make no profits, profits distributed to members are taxed on their own tax sheets.

**marv335**

If they really want to save the world economy, tax the churches!