WASHINGTON–The American Bankers Association and 52 state bankers associations have sent a joint letter to lawmakers in the House and Senate calling for a hearing to be held over “whether the credit union industry’s tax exemption is justified by the community benefit it produces.”
In the letter to the leaders of the House Ways and Means Committee and Senate Finance Committee, the groups alleged credit unions have “strayed from their original mission as nonprofits designed to provide consumer financial services to those in need.”
Instead, they acquire banks, issue subordinated debt and offer nationwide membership, the banking groups said.
‘Disclosure & Transparency Needed’
“Credit union growth, while theoretically positive for the communities credit unions serve, is only beneficial if it is accompanied by congressional oversight and careful regulatory supervision that accounts for the potential consequences of that growth on the credit union model,” the letter states. “…As credit unions continue to grow, Congress has a responsibility to ensure that disclosure and transparency requirements keep pace and provide adequate documentation of responsible stewardship of taxpayer funds,” the associations said.
20 Years Between Hearings
According to the letter, the associations believe in competition and the benefits it provides to U.S. households, but said they also believe taxpayers deserve accountability and that financial institutions “awarded special tax and regulatory treatment should live up to their stated missions.”
Noting it’s been two decades since Congress last held a hearing on the credit union tax exemption, the letter states, “Hearings once every 20 years are not enough for the 140 million consumers who use credit unions, nor the taxpayers who subsidize their services,” they said.
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