First West Credit Union

First West Credit Union

March 25, 2013 12:00 ET

Federal Tax Increases for Credit Unions a Concern Says First West Credit Union

LANGLEY, BRITISH COLUMBIA--(Marketwire - March 25, 2013) - One of Canada's five largest credit unions has weighed in on the surprise announcement in Thursday's budget, in which a tax deduction available for credit unions would be phased out over the next five years beginning in 2013. First West Credit Union, based in British Columbia, expressed concern that the changes would negatively impact most credit unions, but primarily small and mid-size credit unions serving rural and under-served communities across the country.

"While the proposed budget changes won't have a dramatic impact on larger credit unions like ourselves, it's important that we speak up for the small and mid-sized credit unions that provide quality, accessible banking services to Canadians," says First West CEO Launi Skinner. "Credit unions have served as an alternative solution to the big banks and have resonated with Canadians for more than a century, often times incurring higher costs to operate in small, rural and underserved communities across our country. They play a significant role in ensuring banking stays accessible to all Canadians."

According to First West CFO Tom Webster, the government's decision comes at a critical time in the country's ongoing economic recovery. Larger co-operative financial institutions like First West will experience less impact as it is close to reaching the threshold for accessing this tax deduction. For smaller credit unions however, the increase in their tax rate comes at the same time when operating margins are being squeezed as regulators are looking for increase capital to be held.

Webster adds, "The preferred rate was originally introduced to enable credit unions to build up their capital as we are not able to issue shares in the public market like traditional banks. Given that growing capital is more important than ever, it's disconcerting that this tax deduction is being eliminated."

"It's important that the government is aware that in small towns across our country, the local credit unions are also the local hero," says Skinner. "In these communities, they're often the leaders in community investment and philanthropy, volunteerism and advocacy. They're more than just a reliable financial institution-they're part of the social fibre of our country."

About First West Credit Union

First West Credit Union offers members the financial strength, comprehensive product selection and extended branch network of a large financial institution while maintaining local brand identities and a unique grassroots approach to service. Led by Launi Skinner, First West is British Columbia's third-largest credit union with $6.6 billion in assets under administration, more than 169,000 members and close to 1,300 employees. It operates 40 branches throughout the province under the Envision Financial, Valley First and Enderby & District Financial brands. For more information on First West Credit Union, visit firstwestcu.ca.

Follow First West Credit Union on Twitter: @firstwestcu

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