WASHINGTON—NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt sent a letter to the Senate Banking Committee asking for relief for CUs from the member business lending (MBL) cap.
She also outlined the benefits of the industry's tax-exempt status, which allows CUs to do more to help businesses and consumers recover from the coronavirus pandemic.
Hunt sent the letter to Senate Banking Committee Chairman Mike Crapo (R-ID) and Ranking Member Sherrod Brown (D-OH), and House Financial Services Committee Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC) and both committees' members in response to a letter from the National Taxpayers Union (NTU) that Hunt said “mischaracterized” the issues.
‘Fail to Mention’
"In their letter, NTU uses the fact that credit unions are seeking to do more to help small businesses recover from the pandemic by getting flexibility from the credit union [MBL] cap as a reason to suggest Congress impose new burdens and taxation on credit unions," Hunt wrote. "What they fail to mention is that, in the middle of the pandemic, many banks refused to offer Small Business Administration (SBA) Paycheck Protection Program (PPP) loans to many very small businesses, leaving them with no choice but to go to their local credit unions. Many small businesses have joined credit unions in order to get help during this pandemic. Credit unions want to be able to continue to serve them as they recover post-pandemic."
In addition, Hunt addressed NTU’s attack on the industry's federal tax exemption, noting that NTU supported the Tax Cuts and Jobs Act, which provided banks with tens of billions of dollars in annual tax breaks, and nearly one-third of banks are Subchapter S corporations that do not pay corporate income taxes. She shared how credit unions' tax status benefits the U.S. economy with roughly $16 billion a year.
Hunt also reiterated that credit unions are a well-regulated industry and defended the NCUA's efforts to modernize field of membership requirements and highlighted that the Supreme Court declined to take up the American Bankers Association's challenge to these efforts.
‘Misguided and False’
"NTU’s attempt to undermine credit unions is misguided and false," Hunt stressed. "Credit unions have a tax exemption based on their structure and not-for-profit status. This tax exemption has been recognized many times by Congress over the years. Trying to link the tax exemption to the MBL cap (imposed in 1998) is illogical and has no place in the current discussions of pandemic-related policy.
"Credit unions have proven themselves time and again to be pillars of their local communities and underserved areas. While the NTU is busy attacking credit unions, credit unions are busy serving their members and helping people who have been turned away by banks," she concluded.