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MADISON, Wis. – With coffers enriched through voluntary credit union contributions to a “Unity Fund,” the Wisconsin Credit Union League is gearing up to counter any plans by the banking industry at the state or national levels to push for taxation of credit unions. Within the state, the Wisconsin Bankers Association (WBA) has made no secret of its plans to pursue taxation of credit unions, said Brett Thompson, CEO and president of WCUL. He said Harry Argue, who retired in March as WBA’s chief executive, has made such comments in the past and Kurt Bauer, who became WBA executive vice president and chief executive officer this spring, made comments recently. The March 19, 2004, print edition of The Business Journal serving Greater Milwaukee quoted Bauer as saying: “Large credit unions act just like banks and should be taxed like banks.” Calling it not a matter of “if” but “when,” Thompson said a federal or state tax proposal would be a threat to credit unions and consumers. “We’ve been on heightened alert for about a year. We’ve been fortunate in the last year that the bankers have had their own tax woes and have had to focus on that. That gave us time to sit down and discuss what might occur and develop a strategy.” Thompson said the league has stepped up efforts to educate legislators and members and prepare for the kinds of arguments that the banking industry might present. “We’ve increased communications with members, letting them know about the credit union difference, and encouraging members to keep in touch with their legislators.” Carol Adler, chair of the WCUL Board of Directors and its government affairs committee as well as president/CEO of Marshfield Medical Center Credit Union in Marshfield, Wis., said the league is prepared to counter the WBA’s “usual misstatements and twisted messages that blur the distinction between banks and credit unions. Along with that is the need to keep credit unions engaged and aware of the potential for credit union adversaries (state or federal) to try to introduce damaging legislation. The WBA has made no secret of their intentions and we recognize that the league must continually encourage our credit unions to remain alert at all times.” She said the Unity Fund “is part of our preparation for a battle. Wisconsin credit unions have generously supported our efforts and I am sure will do so in the future if the need exists.” Thompson said the Unity Fund “received about 92% total contribution that was possible. We are very happy with the result.” Now lacking a director of government affairs with the departure of Georgia Maxwell, the WCUL plans to fill the void as soon as it can, says Thompson. Adler said she has “every confidence in our management to address this issue. We have experienced staff and contract lobbyists who can do the job in the interim. Additionally, any attempt to tax credit unions would most certainly create a groundswell of support from Wisconsin credit unions themselves. We look at this as a collective effort versus an individual effort.” Adler said the taxation threat “is not new to Wisconsin credit unions and so we have many strategies – too numerous to detail. The Government Affairs Committee, Board of Directors and league management and staff have reviewed many scenarios and we feel very prepared to deal with what may come our way. One strategy is to continue to communicate with our elected representatives to make sure they get the entire story.” Regarding any proposal to tax credit unions, said Thompson, “it’s no secret in what the reality is. A tax on credit unions would be a tax on consumers. Consumers will end up paying, receiving lower rates on savings and higher rates on loans.” Thompson said the state bankers association has led the nation in its aggressive behavior toward the credit union movement. The banking industry’s reason? “It could boil down to competition, the need to increase market share,” said Thompson, although he said that banks control roughly 88% of the market share in Wisconsin. “The largest bank in Wisconsin is bigger in assets than all of the credit unions in Wisconsin combined.” Nationally, there have been intensified lobbying efforts by the banking industry to persuade Congress to revisit the credit union tax exemption. In an article on its Web site April 21, the Michigan Credit Union League noted that U.S. Rep. Sander Levin, D-Royal Oak, Mich., recently issued a strong statement of support for credit unions. “I strongly support CUs and the vital services they provide to millions of American consumers,” Rep. Levin said. “I am concerned that some in Congress have suggested re-examining the tax-exempt status of credit unions. I believe such a re-evaluation is unnecessary and unwise.” Levin’s statement came in part because of rumors that the House Ways and Means Committee may hold hearings on the tax issue this summer.Levin’s strong support for credit unions on the taxation issues was praised on the Web site article by David Adams, MCUL president and CEO. “Congressman Levin has once again shown his stalwart support for CUs and their tax exemption,” said Adams. “We hope the banking industry will begin to realize that members of Congress such as Sander Levin understand that a tax on credit unions is nothing more than a tax on consumers. Removing the tax exemption would severely weaken a credit union system that does so much good for American households.”

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