(June 26, 2008 – New York, NY) This past tax season, credit unions worked closely with low-income people across the country to help members and their communities file their taxes for free. As part of the IRS’s Volunteer Income Tax Assistance (VITA) program, 37 community development credit union (CDCU) members of the National Federation of Community Development Credit Unions (Federation) and 8 Community Development Partner credit unions helped low-income residents keep millions of dollars in their communities.
“The Federation is proud to partner with the IRS to support VITA sites at credit unions across the country,” said Federation President/CEO Cliff Rosenthal. “Our member and partner credit unions work hard to provide their communities with access to affordable financial services, and the VITA sites help ensure low-income people get the tax money they deserve.”
In New York City, one of the premier locations for the VITA and Earned Income Tax Credit (EITC) programs, CDCUs teamed up to prepare 6,681 returns and bring New Yorkers $7.8 million in refunds and between $2 million and $4 million in Economic Stimulus Payments. In addition, VITA users who deposit their tax refund in a savings account are eligible to receive up to a $250 match after twelve months.
In Upstate New York, Alternatives FCU (Ithaca, NY) was busy with their own VITA program, helping low-income residents receive more than $2 million in refunds. With the help of 79 dedicated volunteers, Alternatives FCU’s Community Tax Program filed over 1,200 federal tax returns, returning an average of $1,514 to clients served. Over 1,200 state tax returns were also filed, putting an additional $403, on average, back into the pockets of working families in our community.
ASI FCU (Harahan, LA) has been helping Louisianan’s with their taxes for the past six years. Shannon Cian, ASI FCU’s VITA coordinator, explained that “ASI continues to be a VITA sponsor because the program helps residents avoid predatory lenders and brings much needed money into the community.” Without the VITA sites and credit union’s low cost refund loans, many filers would pay as much as 700% APR for a 7-day Refund Anticipation Loan.
Tongass FCU, a CDCU in rural Ketchikan, Alaska, has been operating a VITA sites for five years. In 2008 they helped over a hundred people receive over $47,000 in tax credits, and this year, with the help of a grant from NCUA, they were able to help people in Metlakatla, an island town with only 1,400 residents, where Tongass FCU is the only financial institution. “In the past, residents would have had to take a sea plane or a ferry to Ketchikan just to do their taxes, so the VITA site has been a big help to their community,” said Susan Fisher, the credit union’s CEO.
The Pascua Yaqui Tribe (Tucson, AZ), a group that is working with the Federation to organize their own CDCU, helped over 550 people file taxes this year, returning over $1 million in returns to their community. Len Goeller & Frances Hosten, VITA site coordinators and members of the credit union organizing team, spoke about the program’s effectiveness, “tribe members feel more comfortable working with us because in a room of ten volunteers, it’s very likely that a filer will know someone and feel welcomed,” they noted.
“It’s clear that credit union VITA sites are helping low-income communities around the country to keep millions of dollars of their hard-earned cash,” said Rosenthal. “Rather than using high-cost tax preparers, our CDCUs and Community Development Partners are providing an alternative that builds rather than strips wealth.”
“It’s also important to note that in addition to VITA sites being an incredible benefit to the community, they are also a great membership growth strategy for the participating credit unions,” explained Rosenthal. “Many of our CDCUs experience their greatest growth during the tax preparation season because of their VITA sites. It’s really a win-win for everyone involved, which is why the Federation has been promoting this program for well over a decade,” he added.
Jim Blaine, CEO of State Employees’ CU (Raleigh, NC), operated a VITA program for the first time in 2008. The second largest credit union in the nation, they helped return $14.2 million to 15,500 people at 216 sites. In addition to supporting the community, Blaine agreed with Rosenthal on the value of the program for membership growth at the credit union. “When potential members arrived for tax preparation, it provided an excellent opportunity for our employees to promote the benefits of membership,” he said.