WASHINGTON – CUNA President/CEO Jim Nussle has sent a letter to members of Iowa Senate urging them to reject legislation that would place an additional tax on credit unions.
Senate Study Bill 3197 would raise taxes on Iowa credit union members and reduce taxes on banks and their stockholders, many of whom do not live in the state, according to CUNA.
As bank attacks have ramped up in the state, CUNA said it has been working closely with the Iowa Credit Union League to combat the issue.
As CUToday.info reported, Iowa’s bankers recently launched a multi-media campaign that includes television ads calling for an end to the credit union tax exemption. The campaign was launched in conjunction with tax reform talks going on in the Iowa legislature.
“Simply put: this legislation would raise taxes on Iowa credit union members and reduce taxes on banks and their stockholders, many of whom do not live in the state,” Nussle wrote. “It would make it more expensive for Iowans to access safe and affordable credit provided by not-for-profit financial cooperatives. This legislation is bad for Iowa and we urge this body to soundly reject it.”
Nussle, who is a native Iowan who represented the state in the U.S. House from 1991 to 2007, pointed out in the letter that credit unions make up just 14% of the state’s financial market, but the competition CUs provide for-profit banks “creates a less predatory environment for Iowans and keeps bank fees from getting even more outrageous.”
Nussle also cited data that showed Iowa credit union 60-month new car loans average 3.21%, while the same loan at banks average 4.37%, a difference of $940 on a $30,000 car.
“In addition to quantifiable benefits, credit unions also provide Iowa consumers with significant intangible benefits. Credit unions exist to help people and strictly adhere to the ‘People Helping People’ philosophy and their structure lends to a focus on providing exceptional member (customer) service. Credit unions offer full and fair service to all of their members,” Nussle wrote.