As a Mattel Federal Credit Union member, you can take advantage of lower rates, higher savings dividends, and low or no fees. Such benefits are available to members, in part, because Congress granted credit unions a long-standing exemption from taxation, and with good reason.

Not-for-profit credit unions return profits to members, and are led by an all-volunteer Board of Directors who are not compensated for their services. Credit unions also help the financially under-served, including members with below-average incomes, or those with limited or damaged credit. Banks, however, earn billions in profit from customers of their choosing, and pass those profits on to stockholders.

Why Credit Union Tax Exemption is Fair

The American Bankers' Association claims that the tax exemption gives credit unions an unfair advantage in the marketplace and hurts banks. But statistics tell a different story: Federally insured credit unions had $662.4 billion in assets as of March 31, 2005. FDIC-insured inistitutions held over $10.2 Trillion in assets, and last year these institutions grew by an amount that exceeds the total assets of all credit unions combined. Additionally, the growth of not-for-profit credit unions is a direct result of keeping our promise to serve the financially under-served.

Credit Union Tax Exemption Broad Support

Historically, credit unions have had broad support from Congress. In fact, Congress reaffirmed the tax exemption status of credit unions in 1998. However, led by the Bankers' Association, a subcommittee of the House Ways and Means Committee met last November with the sole intention of reviewing the credit unions' tax exempt status. For now, no recommendation have been made. But if our tax-exemption were revoked, our not-for-profit status and your credit union advantage would be in jeopardy.

As in all financial matters that affects you, we will keep you informed about this issue and work hard to protect your interests.