Senate Finance Committee Chairman Max Baucus andRanking Member Orrin Hatch have sent a letter to their colleaguestating that they want to start with a clean slate on tax reform.It would be excellent if that really happens. Programs would haveto prove that they provide value in order to receive tax exemptions. The senators' letter described the tax code as“littered with preferences for special interests.”

The exemptions that make it through the process, according tothe senators, will have to provide evidence of economic benefit,that they make the tax code fairer or effectively promote otherimportant policy objectives.

As Meat Loaf sang, “Two out of three ain't bad.” Credit unionsshould have no trouble meeting the criteria. In an effort to headoff the initiative at the pass, CUNA launched it's Don't Tax My Credit Union campaign, comprising a website on howto get involved, a social media barrage and a traditional mediablitz.

What's been very telling is that only a quarter of credit unionsare lobbying through this campaign to protect the tax exemption.Certainly some are using other methods, but only one in four arefighting to maintain the tax-exempt status of credit unions,allegedly the most important advocacy issue of all. Some might saythat getting 25% of any group to do anything together is a win.

I'm not faulting CUNA, or NAFCU for that matter. The tradegroups send out alerts, provide sample language and offer relevantmarketing among other things. What they cannot do is click the sendbutton for your credit union. They can't put the poster in yourlobby or post an alert to your website. Credit unions need to makethe time to get involved in matters that threaten their veryexistence.

On an individual professional level, you've discovered that youcan't just work hard and expect to get noticed. You have to promoteyour hard work and results to those in power. It's no different atthe credit union level.

An expense of this proportion on the credit union community justas the economy seems to be turning the corner could be the deathknell for credit unions as we know them. Taxing credit unions would lead to mergers and conversions tobank charters in droves.

Last fall, NAFCU began beating the drum on the tax-exemptionissue when it released a study during its Congressional Caucus.“EconomicBenefits of the Credit Union Tax Exemption to Consumers, Businessesand the U.S. Economy” found that eliminating credit unions' taxexemption would cost the federal government $15 billion in revenue,$148 billion in GDP, and 1.5 million lost jobs over the nextdecade. According to NAFCU, consumers are benefited by $10 billionper year because credit unions are exempt from federal taxation.Bank customers also benefit from credit unions because theincreased competition keeps rates lower. The cost to bank customersif credit unions' market share were cut in half between 2005 and2011 could have reached as high as $6.3 billion per year, totaling$30 billion, the report portrayed.

More recently, in response to the senators' letter, NAFCU'sincoming CEO, Dan Berger, responded with a letter that read, “Theefforts of credit unions and the large positive impact they have onthe financial welfare of American consumers would not be possiblewithout the credit union tax exemption…Without credit unions,for-profit banks would remain unchecked and likely increase ratesand fees on consumers. Additionally, many consumers would not haveaccess to traditional financial services institutions and have nochoice but to turn to high-cost predatory alternatives.”

Citing Mr. Loaf again, “Baby we could talk all night, but thatain't getting us nowhere.” Credit unions can easily demonstratewhat all of their talk is about. Credit unions do tremendouswork in theircommunities and inviting your members of congress to some ofthese events, even if they don't show, is a first step. As theinvites become more repetitive, they'll know your institution, seewhat you're doing and maybe even attend one or two. Fort CampbellFCU with other areas businesses ran an event from Memorial Daythrough Independence Day where members could write their thanks tothe troops on a Chevy Cruze. It ties in with the credit unions'field of membership, demonstrates cooperation with other localbusinesses and is as American as apple pie. Credit unions provideeven more than economic support to fulfill the mission for whichthey are tax exempt. Sing it loud.

Sarah Snell Cooke
Publisher/Editor in Chief
[email protected]