CUNA, NAFCU Downplay Tax Threat
Both CUNA and NAFCU sought to downplay a recent suggestion from the President's Economic Recovery Advisory Board that taxing credit unions might be one way to increase government revenue.
"The inclusion of the credit union federal tax exemption is not unusual in reports such as these that tend to take note every possible revenue option under the sun," said CUNA CEO Bill Cheney, speaking of the group's Report on Tax Reform Options. "We will be vigilant, as always. But the report explicitly states that these are policy options, not recommendations, and that they should not be construed as Administration policy. Indeed we do not believe the Administration or Congress has any desire to raise taxes on 92 million hard-working Americans by altering the tax status of member-owned credit unions, especially in the current economic environment."
Fred Becker, CEO of NAFCU echoed a similar theme.
"Taxing credit unions would do grievous harm to the many lower-income families that rely on credit unions for their basic financial services," Becker said. "This proposal runs counter to the president's objective of not overburdening taxpayers, particularly those who are struggling to survive in these challenging economic times.
"While banks have tightened lending," Becker added, "credit unions have continued to support their members with available capital. Their prudent business practices have been recognized and lauded by many. The tax exemption allows credit unions to compete and offer their members lower fees, better service and competitive rates in a landscape dominated by huge financial institutions. In fact, the tax exemption evens the playing field for credit unions, which are more heavily regulated than banks."