(Danville, PA) – At Service 1st Federal Credit Union, in addition to helping you achieve your financial goals, we also want to keep you informed. Since 1909, the year the first credit union was established in the United States, credit unions have been making a difference by being focused on a “people helping people” philosophy. Noted for supporting those that other financial establishments turned their backs on, credit unions have spent the past 115+ years building trust, helping members, member’s families and even their businesses achieve financial success. Most importantly, credit unions have stuck to their roots, by remaining a trusted financial resource, supporting the underserved.

Over the years, one item that has helped credit unions successfully fulfill this role in our economy, is not having to pay federal income tax on profits. Congress recognized the importance of the credit union movement and provided credit unions with this federal income tax status to ensure they continued to meet the needs of underserved people and communities. This is because credit unions return those profits back to their members in a number of ways. This doesn’t mean credit unions don’t pay any taxes. Credit unions still pay many local, state, and federal taxes and fees. These include payroll and property taxes, and the dividends that credit unions pay to their members are taxed as personal income. Credit unions actually account for $36 billion in local, state and federal taxes annually.* Additionally, there are 4,617 credit unions in the United States, resulting in 1.2 million jobs nationwide.** So our economic impact is quite impressive.

so, what’s the big deal?
While the percent of big banks still far outweigh the total number of credit unions, some still view credit unions as a threat to their business model in part because, the credit union tax status provides credit unions the flexibility to provide non-members an affordable option and members with affordable financial solutions including lower loan interest rates, higher savings yields, fewer/lower fees, and much more.** Credit unions are able to provide additional services and features to benefit members without them having to incur additional fees. They’re also able to use these funds to benefit the communities their members call home. It’s been estimated that the credit union tax status delivers a 1300% return on investment.ƚ And, during times when our economy has been in distress, credit unions have made it a point to reach out to members and in some cases ease fees to help them successfully navigate those challenging times, lessening their overall financial stress. 

making our members proud
43% of all Americans belong to a credit union.** Service 1st is 47,000+ members strong. We enjoy providing competitive rates on loans and savings solutions, introducing new products, locations and features without adding fees and we truly enjoy taking an active role and supporting our local communities. In 2024, we eliminated overdraft transfer fees and return item fees saving our members $220,000 annually. We’ve expanded our digital resources, adding features like early direct deposit, so members can access their funds earlier and digital issuance, providing members access to their credit and debit cards sooner via the use of their mobile wallet. We established our 12th branch location in Muncy, PA and started to incorporate Interactive Teller Machines (ITMs) to more efficiently utilize our team to assist members. We donated nearly $500,000 to over 360 charitable organizations so they could continue to have a positive impact locally. And whether in-person or virtually, we provide educational opportunities for members and non-members throughout our seven county market area. Click here to view our 2024 giveback report card. 

These are just a few of the reasons why we want to take this opportunity to shed some light on what you may be hearing and how a change to this tax status could affect Service 1st and our members. We will continue to share updates and resources about this topic.

For additional information, select the chat icon below to connect with a member of our team, send a secure message to us via digital banking, stop by your favorite branch location or call our Contact Center at 800.562.6049.


* Source: https://www.americascreditunions.org
** Source: https://www.donttaxmycreditunion.org
 ƚ Source: https://americascus.widen.net