WASHINGTON–The American Bankers Association has included the credit union tax exemption among the items it is urging the new Congress to review. The letter touches on a tactic the ABA has used in the past, by essentially seeking to divide credit unions and saying it only wants the tax status of “massive” credit unions to be reviewed.
Among the bullet points in the ABA letter is one titled “Tax Reform” in which the bankers group calls on Congress to “Reduce rates to drive growth while simplifying the complex tax code—plus eliminating poorly targeted subsidies to massive credit unions and farm credit lenders that no longer pursue their missions.”
Many of the other points in the letter are similar to those being outlined by credit unions in their own goals for the new Congress and Administration. The bankers note, for instance, that for the first time since the 1890s there are fewer than 6,000 banks in the country, which is said is the result of “strong headwinds posed by increased prescriptive government regulation and competition from less-regulated financial players.”
The ABA also calls for a paring back of Dodd-Frank, for tailored regulations, for reformed mortgage rules, for housing finance reform, for changes in the treatment of student debt, and more.
"There are a tremendous number of issues outlined here where bank interests align with those of credit unions, but once again the ABA takes a gratuitous swipe at the credit union tax exemption,” said John McKechnie, senior partner at Total Spectrum. "At some point that's got to dampen our enthusiasm for linking arms with the bank lobby at the same time that they're trying to fundamentally change the cooperative, not-for-profit structure of credit unions."
A copy of the letter can be found in CUToday.info’s The gov here.