WASHINGTON –Following a letter to Sen. Orrin Hatch (R-UT) from 52 state bankers’ associations that challenged the CU tax exemption, CUNA and NAFCU have responded with a joint letter that defends credit unions’ tax-exempt status.
In their letter to Hatch, who is chairman of the Senate Committee on Finance, the credit union letter says the “recent information propagated by state bank associations criticizing this status is erroneous.”
The joint letter, which was also sent to members of the Senate, comes in response to a letter 52 state bank associations directed to Chairman Hatch.
"The banking lobbyists would like the tax status to be limited based on the products or services credit unions offer, the size of credit unions individually and as a sector of the financial services industry, their efforts to support their community and raise overall awareness, and other factors,” said CUNA CEO Jim Nussle and NAFCU CEO Dan Berger in the letter. “But these factors have nothing to do with why Congress originally conveyed the tax status, nor why it continues to be extended. The fact is credit unions’ structure has not changed and they continue to fulfill their mission."
'Numbers Speak for Themselves'
The CUNA and NAFCU letter also points to bank fines and settlements they say have marred the banking industry and called on the banking groups to focus on mitigating their own issues as opposed to attacking credit unions.
"The numbers speak for themselves when you look at big bank fines and various settlements and buy-backs stemming from the financial crisis that total over $135 billion in penalties paid by big banks...,” the letter from CUNA and NAFCU says. “The banks’ attack is the height of arrogance when you realize that a number of these settlements ended up being tax deductible for the banks! Analysis of these settlements has estimated the tax break value of these settlements at over $17 billion, which is more than five times the estimated annual tax expenditure for the credit union tax exemption."
The full copy of the letter can be found in CUToday.info’s The Gov.