We opened the 1,000-page draft tax reform proposal from the House Ways and Means Committee with caution. We’d been advised by several sources that the proposal wouldn’t make any changes to the credit union tax exemption—but seeing is believing.
Our experts scanned the table of contents, reviewed the sections on “tax-exempt entities,” studied every entry that contained the word “exemption,” and searched for the phrase “credit union.” We found nothing—no words, no threats, no changes.
Credit unions were absent from the first, comprehensive tax reform proposal to be presented in Congress in years. That’s not a small thing—that’s a very big thing. In fact, as John Magill, CUNA’s executive vice president for government affairs, told Bloomberg News following the unveiling of the tax reform plan: “We’re very, very pleased with this very big, big win.”
We’re especially pleased because other groups didn’t fare so well under the tax plan by House Ways and Means Committee Chairman Dave Camp, R-Mich.—not the least of which were banks, which would face a new tax under the proposal. The fact that this proposal touched them and not credit unions—their longstanding target for new taxes—enrages the banks.
We have tremendous gratitude for Chairman Camp and his staff. They clearly played a key role in keeping credit unions out of the tax plan. While that’s an important element, that wasn’t the whole story.
For starters, the leagues also played a valuable role. The Michigan Credit Union League hasdeveloped a strong constituent-to-lawmaker relationship with Chairman Camp, and keeps him well advised of the tax exemption’s importance.
Other leagues from around the country do the very same thing with the lawmakers from their states, too. This all results in strong support in Congress for our tax exemption.
That’s the power of the CUNA/league/credit union system: Leagues are closer to lawmakers and better positioned to organize credit unions for meetings and advocacy and advise CUNA.
The strong trade groups in Washington depend, rely upon, and obtain their strength from the grassroots systems like these. Groups without that grassroots strength also don’t have anywhere near the advocacy clout that we have.
Without question our Don’t Tax My Credit Union campaign has been a resounding success. Since May 2013 when we launched the campaign, credit union supporters have made more than 1.3 million contacts with lawmakers—mostly via email—urging them: “Don’t tax my credit union.”
The campaign leveraged social media as well, developing a “reach” of more than eight million social media users who were potentially exposed to our core message. The campaign even won an award for our innovative strategy.
The combination of our local presence via the leagues and our national campaign played the key role in keeping our tax exemption safe, at least for now.
But as Magill also said after the Ways and Means Committee plan was unveiled, our tax exemption isn’t yet completely out of the woods, even if it’s not in the current discussion draft. “It could still be added in,” he said.
The Camp proposal is the first word in tax reform—but it’s not going to be the last. The proposal is significant in that it will be the base from which others will start, including those (like the banks) who don’t like the way the plan treats them—and how it doesn’t change the credit union exemption. They will want to turn the tables, and are working on that now.
We have to be prepared for that. And you can be sure that working with credit unions, CUNA and the leagues will be ready for action.
Six federal agencies published guidance last week designed to ensure all depository institutions are aware of expectations when it comes to deposit reconciliation. CUNA’s compliance explains what it means for credit unions in a recent CompBlog post.
CUNA Chief Policy Officer/Chief Economist Bill Hampel said there is no immediate concern for credit unions regarding a U.S. appeals court decision to throw out a $1.27 billion penalty levied by the U.S. Department of Justice against Bank of America in connection with questionable mortgages sold by the former subprime giant Countrywide.