WASHNGTON (9/17/13)--As credit unions continue their all-out push to preserve their tax status, another House Ways and Means Committee member spoke out in support of credit unions. This time Rep. Linda Sanchez (D-Calif.) supported credit unions' tax status by writing an editorial in Credit Union Digest, the California and Nevada Credit Union Leagues' flagship magazine.
Just last month, the chairman of the powerful Ways and Means Committee, Rep. Dave Camp (R-Mich.), also spoke publicly in support for credit unions. Camp noted the "very important role" credit unions play in communities across Michigan and the rest of the country (News Now Aug. 14). He added, "I will continue to look for ways to reduce regulatory burden and to help credit unions in their mission of serving consumers and small businesses with affordable financial services." He made his remarks in a statement delivered to the Michigan Credit Union League & Affiliates.
The House Ways and Means Committee is the chief committee working on tax reform. The leagues' legislative advocacy team has worked with Sanchez, discussing credit unions' vital role in the communities they serve.
"Getting rid of their tax-exempt status would hurt credit unions and consumer choice, and drive up the cost of financial services for everyone, Sanchez wrote. "That's a bad deal for consumers. That's an even worse deal for our communities."
"As a longtime credit union member, I understand the very special role credit unions play in our communities," she wrote. "Credit unions make it possible for small businesses to expand their operations and hire more employees. Credit unions make it possible for students to pursue higher education."
Sanchez represents 158,000 credit union members in the 38th congressional district. "These members include teachers, janitors, firefighters, and military personnel--the people who are the glue holding our communities together."
As a member of the Ways and Means Committee, she said, "I am committed to ensuring that our tax code helps protect middle class families." Although tax reform is long overdue, she emphasized that reform should be "in a way that supports American industry and hardworking Americans" and "provides economic certainty. Preserving the current tax-exempt status for credit unions would help provide some much needed certainty.
"Congress has consistently supported the credit union federal tax exemption because of the special manner in which credit unions serve consumers," Sanchez said. "As nonprofit, member-owned and operated cooperatives, credit unions are focused on returning benefits to their members. That means higher savings yields and lower loan interest rates."
Eliminating credit unions' tax status "would severely handicap the ability of credit unions to compete with the big Wall Street banks. More competition means more choices and better terms for consumers," Sanchez wrote.
Sanchez noted that credit unions have "been historically good stewards of their members' finances. During the 2008 financial crisis, most financial institutions stopped lending money. Not credit unions." She cited their increased lending to individuals and small businesses, and said that during the housing crisis, California credit unions "addressed 80% of their delinquent loans, and less than half of 1% of those loans were foreclosed.
She provided examples of credit unions offering 0% interest loans with no credit checking for janitors or school food service employees required to buy their own uniforms and skip-a-payment options to furloughed school employees.
"Credit unions provide crucial support to our families and communities. This support is why it is important that we preserve the tax-exempt status for credit unions," she concluded.
Sanchez also serves on two crucial subcommittees: the subcommittee on select revenue measures, which has jurisdiction over federal tax policy, and the subcommittee on oversight, which includes oversight of the Internal Revenue Service and the Treasury Department. She is ranking member of the Ways and Means' Manufacturing Tax Reform Working Group, which reviews manufacturing sector tax law.
Earlier, House Ways and Means Committee members Kevin Brady and Kenny Marchant, both of Texas, also issued strong statements supporting credit unions and their tax status.