While Jersey Shore Federal Credit Union is exempt from paying federal taxes, it still pays local taxes, including property, real estate and sales tax, according to Jersey Shore Federal Credit Union Business Developer Erna Laielli.
Laielli was speaking in reference to the new Galloway branch, located at 326 Jimmie Leeds Road. The groundbreaking for the new site was held on Thursday, Oct. 18. The targeted date for completion of the project is October, 2013.
“We will be contributing to Galloway Township,” Laielli said.
A credit union is a not-for-profit, democratic financial cooperative, owned by its members. The boards of directors for credit unions are generally unpaid volunteers, elected by the members. Their social mission is to provide service to people of “modest means.”
It is for this reason that credit unions were deemed exempt from paying federal taxes in the 1930s, and the Internal Revenue Service (IRS) recognizes credit unions as tax exempt because they don’t issue capital.
“We are Federally tax-exempt since we are a financial cooperative,” Laielli said. “Our profits are passed back to our members so you will see higher saving rates, lower loan rates and free or low cost services.”
The Jersey Shore Federal Credit Union is based in Northfield and was established in 1963, according to the union’s website. It was established with $65 at that time, and has grown to possess over $100 million in assets in 2012, according to its website.
“The assets are our member savings,” Laielli said. “Savings accounts, shared certificates, IRA’s; our assets are our members’ assets.”
Their members are any individuals of the community in Atlantic or Cape May counties. It was started by employees of the William J. Hughes Technical Center, and grew over time to include 200 institutions, according to Laielli. In 2005, Jersey Shore Federal Credit Union opened its doors to members of the general public in Atlantic and Cape May counties.
“We can’t invest in anything risky,” Laielli said. “So when the banks had their problems, we didn’t have that.”
She said that in order to cover expenses, they make money from loans, CDs and any type of small fees.
“The fees are usually fees being charged by our partners,” Laielli said.
The project has been in the works since early 2011, according to Jersey Shore Federal Credit Union Chief Operating Officer Virginia Williams. According to Laielli, the credit union has a strong membership in Galloway. It’s also expanding throughout the county, and recently opened an office at the Hamilton Mall.
“It went through the planning phases,” Councilman Jim Gorman said. “I think it’s a good thing. There are a lot of local businesses in the area, and people coming to the credit union might go over to Santori’s to get something to eat, they’ll have to get gas in the township…. It’s something to help give tax relief to the residents.”
He said he hopes Galloway residents will be considered for the positions once the credit union opens.
Mayor Don Purdy, Deputy Mayor Tony Coppola and Councilman John Mooney attended the groundbreaking ceremony on Thursday.
“Galloway Township, and particularly this spot, is a great place for a credit union,” Purdy said in a statement the credit union released Monday afternoon. “The credit union called for a meeting in February of this year bringing forth an idea, not a plan. With great strides, here we are today. In just a little over a year, there will be a beautiful brand new facility sitting in Galloway Township.
“Not only am I a taxpayer, father and business owner, I’m a member of Jersey Shore Federal Credit Union.”
“Jersey Shore Federal Credit Union is an excellent example that Galloway Township’s plans to fast track development is working,” Coppola said.
“The credit union is absolutely, positively the right piece of the puzzle for this particular corner of Jimmie Leeds Road and Eight Avenue,” Mooney said. “The Township is happy and looks forward to a long relationship with the credit union in the future.”