SALT LAKE CITY - The fierce credit union battle with the Utah Bankers Association over a controversial tax bill is due for a crucial vote on the House floor this week as the Utah League of Credit Unions again mobilizes to defeat the bill which imposes a 30% income tax...
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SALT LAKE CITY – The fierce credit union battle with the Utah Bankers Association over a controversial tax bill is due for a crucial vote on the House floor this week as the Utah League of Credit Unions again mobilizes to defeat the bill which imposes a 30% income tax on three CUs but which has widespread implications for the entire industry. Though it was not unexpected, the Utah League of Credit Unions did lose a chance to defeat the bill last week when the House Business and Labor Committee voted 9-4 to move the bill to the House floor. The Utah House’s Republican leadership, spurred on by heavy lobbying by the banking industry and which has several banker-lawmakers in key committee roles, has pushed hard for consideration of the bill introduced by Rep. Jeff Alexander (R- Provo). Alexander and the UBA has maintained CUs are avoiding their fair share of taxes during a budget crisis in the state. Despite the sharp attacks, the Utah League, however, remained buoyed by public response to the bill which some have called a power grab by the banking industry using the tax vehicle as a chance to stifle legitimate CU expansion on field of membership and business loans. An amendment to the bank-sponsored Alexander bill creating a study to look at the issue for a year was voted down by the House Committee as lawmakers said they would like to dispense with the bank-credit tax feud in the current 45-day session which ends the first week in March. Though the committee members voted out the bill as a procedural matter, “some committee members were reserving their right to express their opinion until on the floor when there can be a full public debate,” said one CU lobbyist who viewed lawmaker reluctance to speak out as a hopeful sign. Earlier, the House Committee rejected one amendment to impose a similar 30% tax on banks, a proposal vigorously opposed by the Utah Bankers Association. In urging the 30% “competitive equity fee” on three CUs – America First Credit Union, Mountain America CU and Goldenwest CU – the Utah Bankers Association has charged these three operate more like de facto banks and no longer deserve their tax-exempt status. Meanwhile, the League pointed to favorable press coverage in Utah papers which took aim at banker motives and strategy. Some of the articles cited the loss of income to the state in tax revenue and examiner fees should state chartered CUs impacted by the tax convert to federal charter, a likely scenario. Citing e-mail volume and newspaper articles, the Utah League said it still sees hopeful signs that “the tide may have turned” against the banking lobby. “We are going to turn this around,” vowed Travis Wood, vice president of government relations of the League, contending the bill has progressed slower than the House leadership would have expected considering the Utah Bankers Association “wields such strong influence” in the legislature. House Speaker Martin Stephens is a vice president of Zions Bank and there are other bankers in key jobs including another Zions regional banker on the House Business Committee. Support for the CU position came in a Sunday Salt Lake Tribune editorial urging the bill “be shelved” and lashing the banking industry “for picking a fight” with CUs on legislation that “people don’t want.” -
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