WASHINGTON–Credit unions are in Washington this week for America’s Credit Unions’ Congressional Caucus and the CU tax exemption is higher on the agenda—at least in terms of discussion—than it has been in recent years.
The event, formerly hosted by NAFCU as a Fall counterweight to Spring’s Governmental Affairs Conference (GAC), comes at a time the credit union federal tax exemption is under scrutiny for a variety of reasons, including the expiration on certain tax cuts in 2025, which is to be the subject of a Senate hearing later this week.
On day one of Congressional Caucus, former Speaker of the House Paul Ryan told attendees that CUs should be cautious, as everything will be on the table as far as taxation is concerned.
‘Undermining’ Support
Speaking as part of a call with the media unrelated to Caucus, Jason Stverak, chief advocacy officer with the Defense Credit Union Council (DCUC), shared, “We've all seen there is a coordinated effort from the ICBAA to the ABA to think tanks in Washington to go after the tax status of credit unions and try to undermine its support. Obviously, it’s something that DCUC on behalf of its members has taken very seriously as there have been threats to it over the past six months to a year.”
Stverak said DCUC has also sent a letter ahead of the Senate hearing in which it expresses its position, and he said members on both sides of the aisle know the importance of the tax exemption to defense credit unions.
Grassroots Effort Activated
Last week, DCUC activated a grassroots effort urging its members to contact their representatives in the House and Senate urging the passage of a “clean” National Defense Authorization Act that doesn’t include any amendments related to credit unions.
As has been reported, DCUC has been active in ensuring no language is included in that bill that would amend the Federal Credit Union Act to allow for share insurance coverage for non-member deposits, which Navy FCU has been seeking on Capitol Hill to insure deposits at The Community Bank it operates on military bases overseas.
DCUC, along with other credit union groups, has also been advocating in opposition of any CRA-like requirements for credit unions being added to the bill.
Another Annual Issue Returns
Credit unions are also paying attention as the issue of a government shutdown is once again in the news as Congress has yet to reach a deal on funding the federal government, noted Stverak, adding that when it comes to that near annual issue, “You’re guess is as good as mine.”
“But during our Military Advocacy Committee call last week with our members we were already encouraging them to be begin reaching out to their members to talk to them about what happens if there's a government shutdown, what programs will they have in place to ensure that they are supported during this potential shutdown.”