WASHINGTON–On the same day many attendees at CUNA’s Governmental Affairs Conference (GAC) were hiking the Hill to lobby their representatives, a bank trade group was calling on lawmakers to “ask tough questions” about the credit union tax exemption.
Specifically, the Independent Community Bankers of America (ICBA) said it wants members of Congress to ask their credit union visitors about:
- The role of the credit union tax exemption in the recent spike in credit union acquisitions of taxpaying community banks, which exacerbate industry consolidation and increase the portion of the financial services industry exempt from taxation and the Community Reinvestment Act.
- A recent National Credit Union Administration rule that allows the largest credit unions to partner with private institutional investors to reap greater gains off the credit union tax exemption, which changes the credit union cooperative ownership structure and jeopardizes the basis of credit union taxpayer subsidies.
- Whether federally chartered credit unions should file IRS Form 990 like nearly all other tax-exempt organizations to ensure transparency of their financial operations.
‘Take a Hard Look’
“With tax-exempt credit union representatives this week lobbying Congress for even more favorable treatment from Washington, ICBA is calling on lawmakers to ask how credit union policies are fueling industry consolidation, reducing financial choice, and limiting taxation and Community Reinvestment Act oversight,” said ICBA President and CEO Rebeca Romero Rainey, who detailed the institutional investor issue in a recent LinkedIn op-ed. “Congress granted credit unions a tax exemption to serve people of modest means—not to subsidize their growth at the expense of local communities. After nearly a century, it’s time for Congress to take a hard look at credit union policies.”
ICBA said that for the next several weeks it will be running a targeted digital campaign encouraging congressional offices to press credit union representatives on these issues during meetings and on social media.