The credit union system entered into a new era following the House Ways and Means Committee hearing in the fall 2005 on the credit union tax-exemption. Following the hearing, the committee requested data about whether credit unions are serving the goals intended with their federal tax-exempt status. The data currently being collected by state and federal regulators will be used to demonstrate credit unions' service to members.
NASCUS and state regulators are in the center of efforts to document state credit union service. Since the hearing, NASCUS has actively communicated the state perspective on documenting the credit union mission. In dialogue with the Government Accountability Office and the House Ways and Means Committee, NASCUS continues to emphasize the importance of recognizing dual chartering and the distinctions between state and federal charters. This insight will be key for Congress in understanding and analyzing the report NASCUS submits on the state system.
It is the proper role of NASCUS and state regulators to assist and educate Congress, state legislatures and others on state regulatory matters and the state system. When the House Ways and Means Committee turned to NASCUS and state regulators for data on the state credit union system, we embraced the request as an invaluable opportunity. We are pleased that the Committee came to NASCUS and state regulators as the authoritative voice on state-chartered credit union issues.
NASCUS and its leadership believe it is important that data on state-chartered credit unions be provided to Congress in addition to the information being collected by the NCUA on federal credit unions. Reports on both charters will enable Congress to better understand dual chartering and the unique nature of the state credit union system.
State regulators also recognize the significance of this project to dual chartering. They want Congress to understand that laws governing credit unions vary in the states and that service to credit union members is diverse across the nation. The willingness of state regulators to provide data about credit unions in their states demonstrates their commitment to ensuring that Congress has the information it needs for the overview of the credit union federal income tax-exemption.
Over the past few months, NASCUS and state regulators have worked diligently to develop an effective and cost efficient method to collect the requested data. State regulators will use an online questionnaire and a software program with geocoding to respond to questions in the Committee's four areas of inquiry: income characteristics of members, executive compensation, unrelated business income tax and credit union service organizations.
The positive response of the state system to Congress is remarkable. NASCUS reported to Congress that we expect the entire state system to participate in the data collection project. State regulators are working cooperatively to ensure that the system is represented before Congress and that accurate and objective information is reported to the House Ways and Means Committee. The commitment of state regulators to be responsive to Congress also demonstrates that while we value regulatory autonomy, state regulators can work collectively on issues that impact the system as a whole. State and federal charters differ, but both operate with a federal income tax-exemption. With information on both charters, Congress can perform its due diligence as NASCUS and state regulators have during this data collection process.
NASCUS thanks state regulators for their efforts as the state data collection project proceeds. NASCUS also appreciates the willingness of state credit unions and the credit union community to be of assistance. We look forward to continuing to work with Congress on this important effort.