WASHINGTON (4/30/14)--Bankers have not given up on the credit union tax status, as the Independent Community Bankers of America has highlighted opposition to the credit union tax status as a key issue for its annual Washington Policy Summit.
In a release, the ICBA urged summit attendees to encourage members of the U.S. Congress to review the credit union tax status. The ICBA also called on banks to oppose expanded powers for credit unions, "particularly a proposal to raise the cap on credit union business lending."
The ICBA event, which has around 1,000 attendees, ends Thursday.
"The bankers are a bit late to the party," said Bill Cheney, Credit Union National Association president/CEO. "In February, the House Ways and Means Committee--with its tax reform proposal--made no changes to our tax exemption, and have signaled no willingness to change that stance."
He added, "But the bankers are tenacious--and that should be a sign to all credit unions to keep telling their lawmakers 'don't tax my credit union.'"
The benefits that credit unions provide to both members and others--amounting to an estimated $8.5 billion in 2013 alone--far exceed the total annual tax that could be raised by taxing credit unions, CUNA reminds. These benefits are realized by credit union members in the forms of higher returns on savings, lower rates on loans, and lower or fewer fees than members would have paid or received had they been customers at other financial institutions.
Credit unions also have a moderating influence on bank pricing, by raising bank deposit interest rates and lowering bank loan rates. CUNA estimates that bank customers saved about $2.4 billion in 2013 from more favorable pricing due to the presence of credit unions in their local markets.