Twitter, Taxes, Terror Tell the Tale
WASHINGTON — Twitter and timing, taxes and terrorism all helped make for a lively Governmental Affairs Conference last week in the nation's capital.
On Feb. 25, member credit unions participated in CUNA's Don't Tax My CU Twitter campaign in support of the credit union tax exemption. The next day, the House Ways & Means Committee came out with a tax reform plan that left the exemption at peace.
Meanwhile, talk resurfaced about the unrelated business income tax, an issue credit unions may have thought they had long put behind them.
“Luck is when preparation meets opportunity,” Richard Gose, CUNA senior vice president of political affairs, said about the timing of the Twitter campaign that preceded the traditional hike to the hill.
Lawmakers received at least 8,400 tweets on Feb. 25 during the campaign, Trey Hawkins, CUNA vice president of political affairs said. The potential reach was 5.4 million impressions, he added.
Gose hesitated to call the campaign a win, however, noting that even when tax reform debate quiets on a federal level, credit unions must still battle with bankers who are pressing credit union taxation on a state and local level.
CUNA and NAFCU both applauded the House Ways and Means Committee Chairman David Camp's tax reform draft legislation on Feb. 26 for protecting the credit union tax exemption.
However, the possibility of an unrelated business income tax is still up in the air.
NAFCU said it is reviewing the document closely for provisions that could affect credit unions, including an unrelated business income tax.
“Federal credit unions are exempt from UBIT due to their status as instrumentalities of the federal government, and NAFCU is working to ensure that continues,” said a NAFCU release on Feb. 26.
NAFCU President/CEO Berger told Credit Union Times a UBIT would be “a back-door attempt to place a tax on credit unions.”
CUNA President/CEO Bill Cheney also cautioned that the draft appears to subject credit unions to a UBIT.
“We are gratified that the specific credit union tax exemption is untouched in the Camp proposal, based on our initial read,” he said, but added, “We are concerned that the tax proposal appears to subject federal credit unions to a tax on ‘unrelated business activities’ for the first time. We will be working with lawmakers to obtain more clarity on this provision,” he added.
Meanwhile, Sen. Mark Begich (D-Alaska) and Rep. Denny Heck (D-Wash.) told Credit Union Times Congress should pass the pending supplemental capital bill.
In an interview backstage at CUNA's Governmental Affairs Conference on Wednesday, Heck predicted that the Capital Access for Small Businesses and Jobs Act would get at least 300 votes in the House.
Heck is a member of the House Financial Services and Ways and Means committees. Begich serves on the Senate Appropriations Committee.
The legislation, introduced by Rep. Peter King (R-N.Y.) last year, currently has 47 co-sponsors.
Meanwhile, NCUA Board Chairman Debbie Matz had cyber-threats in mind when she took the stage for her address on Feb. 24.
“Attacks, intended to create disruption, can crash networks but can also serve as a diversion for more damaging assaults,” Matz told a packed general session. “Imagine cyber-terrorists stealing passwords from your credit union and using (it) as an entry point to gain access to every payment system and every vendor with which you have a digital relationship.”
That scenario is more than just a what-if. Matz said hackers already breached a mid-sized credit union and used the credit union's passwords to access one of the larger credit bureaus.
“From there, the hackers stole credit reports on hundreds of people who weren't even credit union members,” she said.
To help credit unions fight the threat, Matz announced a new page on the NCUA's website that provides information, including preventative measures credit unions can take. The NCUA is also participating in a cyber-threat working group with other regulators, law enforcement and intelligence communities, she said.
Meanwhile, on the global stage, credit unions can play a primary role in the success of budding democracies overseas, former Secretary of State Madeleine Albright said during her GAC address on Feb. 25.
“One discussion we always have is which comes first – political or economic development,” she said. “The answer is both, because people want to vote and they want to eat, too. Credit unions can be a key component in that.”