LYNCHBURG, Va. – Don’t mistake Virginia Credit Union League President/CEO Rick Pillow’s inaction in response to the Virginia Bankers Association’s latest tactic to get credit unions taxed, as a sign of apathy. He’s just biding his time until the right moment. In what the League described as “an unprecedented strike at Virginia’s credit unions,” the Virginia Bankers Association has sent letters to local government officials that argue that credit unions are hurting local economies. The two-page, mass mailed letter, penned by VBA Executive Vice President Walter Ayers says, “Credit unions require the same services from your local government as anyone else – roads, water and sewer, police and fire protection, schools and teachers to educate their employees, etc. Having decided to leave behind their original purpose of serving the underserved in order to compete in the open market, why should credit unions not pay the same taxes as all other competitors?” Many local government officials sit on credit union boards, and it was through some of these credit unions that the Virginia League learned about the bankers’ latest campaign. “Ayers’ letter mostly contained the same bank rhetoric we’ve heard before, like how credit unions are growing and how they don’t pay taxes. We don’t deny that credit unions in the state are growing in size, but we take exception to their statement that since credit unions don’t pay taxes, which is also not true, then they don’t support their local communities,” said Pillow. “Many of the same people they cite as not benefiting from credit unions are members of credit unions we serve every day,” he said. Pillow said the Virginia Bankers Association’s letter “is meant to appeal to that group of legislators who are sensitive to the tax issue. It doesn’t take in to account credit unions’ structure and the differences between credit unions and banks.” While he wouldn’t divulge exactly how the League intends to respond to the bankers’ initiative, he emphasized that, “We’ll respond accordingly, given time. It behooves us to respond.” Pillow said he considers the Virginia bankers’ efforts to be part of the “orchestrated effort by banks that we’re seeing across the country. They’re taking their cue from the American Bankers Association. It doesn’t take us by surprise.” Last month, Pillow put credit unions on notice to “be ready to do their part” in fighting the VBA’s “aggressive” lobbying efforts for the review of credit unions’ tax exemption. The VBA has accused credit unions of “exploiting” their tax exemption Pillow alerted credit unions to two studies the VBA is doing on credit unions (CU Times, Nov. 26) – an unofficial copy of one of the studies has already been sent to state legislators and the VBA also included a copy of the study’s findings with its recent letter. “Now is the time for Virginia’s credit unions to stand with their League to ensure the preservation of the Commonwealth’s credit union system,” Pillow advised credit unions. At press time, the League planned to hold a special conference call on Dec. 8 during which it intended to detail its strategy to combat the bankers’ campaign against CUs. It encouraged credit unions, CEOs, board members, as well as legislative representatives to participate in the call. -

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