UBIT is Prime Example of Where Dual Chartering System Needs to Pull Together
WASHINGTON -- NASCUS Chairman Linda Jekel, director of credit unions for Washington State, told CUNA's Governmental Affairs Conference that federal and state chartered credit unions must bond together as they face the expected IRS ruling on unrelated business income tax.
"While UBIT only applies to state-chartered credit unions," she said, "NASCUS recognizes that the implications of one charter's challenges are not always isolated. It is important that we educate the IRS about the modernization of the nation's credit unions. State regulators and state legislatures have long recognized that credit unions must evolve their products and services to meet the needs of members. The IRS must also recognize the modern character of credit unions--institutions that have continued to provide credit and thrift services to their members since 1908. This understanding will be critical in the system-wide effort to reach IRS agreement regarding what is the related business of credit unions."
The IRS is targeting nonmember ATM fees and credit insurance products as things that would fall under UBIT, said Jekel.
"Each year, the credit union system faces challenges and opportunities, growth and struggle," she acknowledged. "While every credit union and organization is successful in serving and representing their members, the credit union system thrives most when we all work together, share a table for open discussion and pull together innovative minds...Let's build on those partnerships, tackle the challenges of this year and ensure the continued longevity of credit unions."