WASHINGTON--The Treasury’s top tax policy nominee did not walk back his opposition to the credit union tax status when answering questions from the Senate Finance Committee, according to answers to his questions for the record released this week, America's Credit Unions reported.
Kenneth Kies, nominee for Treasury assistant secretary for tax policy, was questioned by committee ranking member Sen. Ron Wyden (D-OR) specifically about his past opposition to the credit union tax status.
“If confirmed, I would focus on promoting a strong financial services sector and a level playing field, while ensuring our tax policy supports access to affordable banking without distorting competition,” Kies responded.
As CUToday.info reported, the Senate Finance Committee advanced the nomination of Kies this week. As CUToday.info also reported, just over ten years ago Kies co-authored a seven-page report for Deloitte that advocated the repeal of the federal tax-exempt status for credit unions of all sizes. Kies, currently managing director of the Federal Policy Group, LLC, has also done consulting work for the American Bankers Association and has been outspoken on his position of favoring taxing credit unions.
America’s Credit Unions said its research shows that credit unions of all sizes are uniquely focused on Main Street. Despite claims to the contrary, the budgetary impact of bank tax breaks is 16 times greater than the credit union tax status, and small banks face greater competition from fast-growing big banks than credit unions.
“When banks hold over 91% of assets, and have since the existence of credit unions, it is impossible to claim that credit unions provide any real competition to banks. Credit unions are integral to strong local economies—their not-for-profit status is proven to make financial services more affordable for all,” said Jim Nussle, America’s Credit Unions President/CEO.
“A recent survey from J.D. Power shows consumers trust credit unions, including large credit unions, more than banks,” Nussle said. “Revitalizing communities is a priority for the Trump Administration, and preserving credit unions’ tax status is smart policy to accomplish this goal. It's important to note that Kenneth Kies did not specifically call out credit unions in his responses to the Senate Finance Committee related to tax policy ensuring a level playing field, and we continue to engage with nominated officials to ensure they have the facts about the credit union difference.”
Nussle sent a letter to Senate Finance Committee leaders Tuesday in response to Kies’ testimony. While Kies’ response could imply the credit union tax status doesn’t allow for a level playing field and distort competition, Nussle noted the rapid growth of mega banks—many of which received financial bailouts—has placed community banks on an unlevel playing field against their larger counterparts.
He added that community banks’ return on assets has been higher than large banks and all credit unions six out of the last 10 years, showing credit unions are not harming community banks and there is no ‘distorting competition.”
“We believe it is important that key policymakers, like those confirmed to work at the Department of Treasury, also understand that credit unions are not unfairly competing with banks, but rather filling a need to serve those banks have left behind in the search for greater profits,” Nussle wrote. “It is a duty credit unions take seriously and do with pride.”