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SALT LAKE CITY – Utah may be the prime battleground for bank attacks on the tax exemption but this month it also witnessed a skirmish over the Credit Union Regulatory Improvements Act. Taking out newspaper ads against CURIA is the Utah Taxpayers Association, a group which claims independence but is often linked to the banking lobby, and which charged that the proposed bill in Congress would sharply reduce income going to Utah education. The ads appearing in the Sunday editions of the Salt Lake Tribune and Deseret Morning News declared “Utah credit unions don’t pay corporate tax” but their ability to increase commercial lending will result in “less money for education.” The ads ask Utahns to write the state’s three House members to defeat CURIA on grounds “if Congress allows this massive expansion of tax-exempt business loans, Utah schools will receive millions less in corporate income taxes, leaving Utah families and tax paying businesses to shoulder the burden.” Howard Headlee, president/CEO of the Utah Bankers Association, said he was surprised when he read the ads, “but we appreciate their viewpoint” noting also the UBA joined by the American Bankers Association opposed CURIA in its original form and will oppose the new version “if it has the same elements of the federal government subsidizing credit union commercial loans.” If the government can do that for CUs, “they can do the same for banks,” said Headlee. The Utah Taxpayer ads also make reference to the anti-CU resolution adopted last month by the Utah legislature seeking Congressional oversight on the tax exemption and a review of NCUA field of membership policies. The Utah legislature, said the ads, asked Congress to establish “fair and equitable tax policy among competitors” but CURIA exacerbates inequities among banks and CUs which “is completely contrary to the policy set forth by the Utah legislature.” A spokesman for the Utah League of Credit Unions said a response to the UTA ads was being considered. The UTA, which says it has a membership of 2,500 in the state and claims a motto of “lower taxes and sound tax policy,” frequently has taken the side of the Utah Bankers Association in seeking to eliminate the CU tax exemption. Earlier this year the UTA, which says it is not affiliated with groups in other states with similar nomenclatures, defended Zions First National Bank on its subchapter S policies after it was accused by Utah CUs of using it to shelter income from its Nevada operations to reduce paying Utah corporate taxes. On a separate but related issue, Headlee of the UBA said the association remains “very pleased” with response to the anti-CU resolution from the Utah Congressional delegation during a recent meeting in Washington. He said a “summary document” discussing the resolution, apparently still in the hands of a research unit of the legislature, was presented to the Congressional delegation. The UBA president noted also that the full tax exemption views of Utah Sen. Robert Bennett (R-Utah) may have been misquoted “or dropped out” in another CU publication and Bennett “was not happy about it.” Remarks attributed to the Utah senator claimed Congress had little appetite for dealing with the tax issue now followed later by comments by Utah House Majority Leader Jeff Alexander (R-Texas) citing U.S. Sen. Richard Shelby, (R-Ala.), chairman of the Senate Banking Committee, as a major stumbling block. Headlee also reminded a reporter that Treasury Secretary John Snow, while supporting the CU tax exemption, also “clarified his position that there is an issue to be considered when a credit union expands beyond its original charter.” -

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