Vt. CUs shut down bank tax claims in Statehouse

March 21, 2016

COLCHESTER, Vt. (3/21/16)--An attempt by Vermont bankers to sweep credit unions into a bank-related piece of legislation last week was thwarted by quick and powerful advocacy by the Association of Vermont Credit Unions (AVCU).

During a Ways and Means Committee meeting, the Vermont Bankers Association (VBA) brought up the credit union tax status during discussion of an increase in the state’s bank transfer tax. Vermont imposes a quarterly tax on the average deposits held by banks doing business in the state; therefore, out-of-state banks pay on their deposits resident in Vermont. The bankers’ argument was in response to a budget proposal to raise the current rate, which has remained stable for 19 years.

The VBA and two of its members rehashed the “level playing field” argument and produced a study of the state’s credit unions and their “preferential tax treatment” (NewsLines Express March 18).

AVCU and its Statehouse advocacy team sprang into action, calling for member credit unions to write to Ways and Means Committee members, and sending communications from AVCU President Joe Bergeron refuting the misrepresentations of credit unions portrayed in the banker study. The material included an abbreviated version of AVCU’s point-by-point response and state-specific numbers provided by the Credit Union National Association.

Vermont’s Credit Union Day in the Statehouse--March 17--followed the bankers’ testimony by mere hours, and credit unions were out in full force, talking with committee members and other legislators--some seeking more information, others conveying their support.

By Thursday's end, House Ways and Means Committee members had moved an increased state revenues package that included an increase in the bank franchise tax without applying it to credit unions. The measure moves to the House floor next week and on to the Senate.