WASHINGTON — Optimism about saving the tax exemption was in theair at CUNA's “Don't Tax My Credit Union” event at the Credit UnionHouse the trade group held Wednesday in conjunction with itsnational online rally.

CUNA is working to garner support for its no tax message fromthe across the nation, hoping to get the attention of Congress. The public can write their members of Congress on thecampaign's website, which CUNA saidhas already recorded more than 1 million contacts.

As the battle over the federal budget continues in Congress amida government shutdown, the deadline for raising the nation's debtlimit is fast approaching. CUNA told Credit Union Timesthat the debt ceiling debate could expedite tax reform.

“It's going to be interesting to see how the government shutdownis resolved and when we get into the debt ceiling, if the House, asexpected, includes tax instructions in that debt ceiling, there's apossibility that there will be expedited consideration of taxreform and that could provide us some momentum to get things done,”said Ryan Donovan, CUNA's senior vice president of legislativeaffairs.

John Magill, executive vice president of government affairs atCUNA, said he is optimistic about the passage of a tax reform billbefore December 2014.

“You've got a Republican chairman and Democratic chairman sayingon my watch, which is only for 14 more months, saying they're goingto report a bill,” Megill said.

“We don't know if it's going to be 10 weeks or 10 months, it'snot going to be 10 days but somewhere on down the line, there'sgoing to be tax reform. There has not been tax reform since 1986,”he added.

The American Bankers Association is lobbying Congress to repealtax-exempt status for credit unions. The ABA recently wrote aletter to House Ways and Means Committee Chairman Dave Camp(R-Mich.) and Ranking Member Sander Levin (D-Mich.) asking them tosupport repeal.

“With large annual federal deficits, our country can no longerafford to subsidize the $1 trillion credit union industry, whichincreasingly operates like a tax-free banking system,” wrote FrankKeating, ABA President/CEO.

“The tax code should not be picking winners and losers, but thatis exactly what the credit union tax exemption does. It has aparticularly harsh impact on Main Street community banks. If taxreform is about the principle of making the tax code fairer, thenCongress should end the corporate tax exemption for credit unions,”the letter also said.