The credit union/bank clash over the tax exemption in Wisconsin showed no sign of a letup Monday with the Wisconsin Bankers Association issuing a recycled broadside and the Wisconsin Credit Union League firing back with a rebuttal stressing “the credit union story directly counters” any negative banker claims.
The latest exchange, triggered by a July 15 WBA letter to the state’s Congressional delegation appealing for federal action “in light of the debt crisis,” comes as Wisconsin voters on Tuesday participate in a bellwether election on recall of lawmakers stemming from the March fight curbing collective bargaining rights for state employees and which forced a budget-related shutdown of the state legislature.
Officials of both the WBA and the league stress there is no connection between the Tuesday vote and the tax exemption imbroglio “since one is a federal issue and the other state.”
Still, some of the GOP and Democratic lawmakers facing recall took part in votes in passing the overall budget which contained a clause enabling easy CU to bank conversions.
Gov. Scott Walker, a Republican, had let stand enabling language despite strong objections from the league.
League officials said they would have “no comment” on potential winners and losers in the Tuesday contest.
Meanwhile, regarding the tax exemption, the WBA on Friday again hit on the need to remove the tax exemption given the current environment of “Wisconsin consumers and state and local governments tightening their belts due to the recession and significant budget deficits.”
The CU industry, charged the WBA, “continues to defend its federal and state income tax exemption with vague references and unsubstantiated claims” when “the truth is the credit union tax exemption is among the top 15 costliest corporate tax expenditures in our nation according to the U.S. Office of Management and Budget at the rate of $34.5 million annually in Wisconsin and $7.92 billion nationally.”
Dismissing the charges as “utter nonsense” and “gross exaggeration,” the Wisconsin league countered that banks continue to gouge the public with high fees while last year “in Wisconsin alone, credit union members saved $203 million because of credit unions’ lower loan rates, higher savings rates and lower and fewer fees.”
Tom Liebe, vice president of government affairs for the league, said Wisconsin CUs are already mustering a lobbying effort with Congressional delegation to challenge the WBA attack.
“We’re rather proud of our story and I know Wisconsin credit union leaders are quite comfortable about countering” any of the WBA claims, Liege said.