One down, 99 to go.
Sen. Mark Begich (D-Alaska) included the credit union tax exemption in his July 26 letter to Senate Finance Committee leaders, the only senator to publicly do so.
Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Orrin Hatch (R-Utah) asked senators to submit letters advising the committee which tax exemptions should be spared the committee’s blank slate approach, in which lawmakers should assume all exemptions will be eliminated.
In his letter, Begich said Alaska is far removed from traditional financial centers and that credit unions play an outsized role in the state’s economy.
“That is why Section 501(c)(14), which grants tax exempt status to credit unions, should be retained in any tax reform effort, to ensure continued access to affordable credit for consumers, homebuyers and small businesses alike, all of which contribute substantially to economic growth,” he said.
While Begich is the only senator to make his preference for the credit union tax exemption public, it’s possible other senators supported credit unions in their letters. That’s because Baucus and Hatch promised their colleagues they would keep the contents of the letters confidential. Only about 10 senators made their letters public.
Sen. Chris Murphy (D-Conn.) was among those who made his letter public, posting it on his website. Although he did not mention credit unions, he told committee leadership the tax code should continue to be utilized to encourage certain behaviors in Americans, such as developing good savings habits.
Paul Gentile, executive vice president at CUNA, said that after meeting with several dozen senators over the past few weeks, the trade has been told most of the letters discuss broad themes and did not include specific provisions. And, a number of senators said they would speak privately with the committee leaders rather than write letters.
“So, we have a strong degree of confidence that a number of other senators have weighed in on behalf of credit unions, and we are greatly appreciative of Senator Begich for having done so publicly,” Gentile said Tuesday.
NAFCU Vice President of Legislative Affairs Brad Thaler called his trade’s meetings with senators on the topic of tax reform positive, and staffers have expressed support for the credit union exemption.
“Furthermore, protecting the credit union tax exemption will be a big focus of our message to the Hill when we bring hundreds of credit union representatives to town for our Congressional Caucus this September,” he said.
Industry lobbyists will nonetheless have to contend with an offensive from the banking lobby to end the exemption. The American Bankers Association on Tuesday launched a new website that will assist its members in their efforts lobbying against it.
“At www.aba.com/ItsTimeToPay, bankers can take grassroots action, view key messages and learn more about why it’s time to ask credit unions to pay their fair share,” the ABA said in an email to members promoting the new site.