The answer is Yes, however you might wanna make sure and wait for another person to confirm my answer as I am not very confident. Better yet, why don't you email the Discover Card guys because they can answer your Discover Card question better...

I think that simply restricting fields of membership will be sufficient. For instance, a credit union that has a field of membership covering an entire state could be pushing it, and a credit union that asks something like "do you have a pulse?" shouldn't be allowed to exist. Basing fields of membership on things such as organizations and employers (even national ones) would still be alright, since the number of people would still be low in comparison to the geographic area covered...

+1.

Devil's advocate: CUs and community banks could both be serving similar clienteles and exercise a more prudent, balanced, long-term approach to UW in the interests of (usually - outside of CB;)) local membership base. The existing tax break helps CUs at the expense of community banks...

The government is already taxing us enough. If anything were to be done, it should be to gradually reduce the taxes on all banks, but only when they eliminate their risky speculation, mark all their loans to market value, and repay the stimulus funds with interest at a fair market rate. The banks that can't do this must fail!..

I agree that that statement is no longer true. Most CU's today cherry pick. I think it is time for a lot of the CU's to not be tax exept, but not all...

Pfftttt, start taxing them and they will turn into a bank. We did the big banks a favor, return some of that to CUs in the form of not being taxed...

If they are going to tax CUs, why not start taxing other non-profit organizations? Would be asking this question if they wanted to tax the ASPCA? Not for profit, means just that, not making a profit. A CU is passing dividends to members through higher savings rates, and lower loan rates. That money being earned/saved, is taxed as income or not being deducted as loan interest..

A CU is essentially acting as a pass through entity..

This post has been edited by.

Greywolf.

: 03 January 2010 - 05:49 PM..

IMHO, there is little difference between for-profits and non-profits..

AND, some non-profits could benefit by TRYING to earn a profit...

"Non-profit" can be a bit of a misnomer. Many organizations aren't organized to generate a profit, but may be profitable ventures. Non-profits just don't distribute earnings to shareholders (since they have no shareholders). Being a "non-profit" doesn't mean that they plan to lose money or break even every year..

There is also a significant difference between the various types of organizations. I worked mainly with 501©3 organizations (foundations), 501©6 organizations (membership associations), and 501©4 organizations (mostly PACs and Unions)..

I found that C3 organizations were generally run more like a public institution (amassing donor funds and fulfilling a mission), whereas C6's run much more like a traditional business (provide a service which members pay a fee for)...