WASHINGTON (2/28/13)--Rep. Brad Sherman (D-Calif.) reiterated his support for virtually all significant credit union issues Thursday during a speech at the Credit Union National Association's Governmental
|Rep. Brad Sherman (D-Calif.) offers strong support for credit union issues during a speech Wednesday at the Credit Union National Association's Governmental Affairs Conference. (CUNA photo)|
Perhaps most significantly, Sherman vowed to stand by credit unions in preserving their tax status. Under the Federal Credit Union Act, federal and state-chartered credit unions are exempt from federal income tax because they are cooperatives operated for and by their members, and because credit union shares are essentially members' deposits. The tax status has been reaffirmed periodically by the U.S. Congress and is supported by many lawmakers.
Sherman noted that credit unions merit their tax status because they are member-owned, not-for-profit financial institutions.
Sherman said that if credit unions had to pay more taxes, "The cost to our economy and the resulting loss of revenue would be far greater than any amount of tax we would collect from your institutions."
"We have got to fight for this exemption and I will be with you every step of the way," he pledged.
Sherman, along with co-sponsor Rep. Peter King (R-N.Y.), recently reintroduced CUNA-supported legislation that would permit the National Credit Union Administration to allow credit unions to accept additional forms of capital.
If the legislation is passed, credit unions could hold subordinated debt instruments, which would allow them to retain member ownership, Sherman said.
Let's contrast this to the banks, Sherman said. "They asked us for $700 billion in capital. You're asking us to get out of the way and let you raise capital from the private sector. Which is the better way to provide capital for America's financial institutions?"
Sherman also expressed support for the Small Business Lending Enhancement Act, which would increase the credit union member business lending cap to 27.5% of assets from the current 12.25%-of-assets level.
The bill, if enacted, would help credit unions lend an additional $14.5 billion to small businesses in just the first year after enactment. This money, which would be made available at no expense to taxpayers, would in turn help small businesses create more than 158,000 new jobs.
"What's not to like," Sherman said. "All you need is for us to get out of the way. I don't know a single member of Congress that can't give you a list of 100 small businesses in his or her district that need a loan and want to expand."
Sherman, with Rep. Blaine Luetkemeyer (R-Mo.), also recently introduced a 2013 version of The Eliminate Privacy Notice Confusion Act, which is backed by CUNA. Sherman called the current privacy requirements "a complete waste of paper."