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WASHINGTON-CUNA’s top lobbyist said that the trade association is witnessing background work being done for consideration of credit union taxation in Congress. “A number of factors are coming together,” CUNA Senior Vice President John McKechnie explained. Mounting pressures on the federal budget exist on all sides, from the War on Terror and Hurricanes Katrina and Rita to the perennial budget reconciliation jumping to the forefront in lawmakers’ minds. “We have learned that the Ways and Means Committee staff are beginning to look at the legislative history” of credit union taxation and service to the underserved, according to McKechnie. A Ways and Means Committee spokesperson declined to comment, stating only that no public hearings have been announced. McKechnie said this is the same “non-denial denial” credit union friends on Capitol Hill are hearing, but it is not an answer to what is going on behind the scenes. Credit unions have been eyeing the committee’s activities ever since Chairman Bill Thomas (R-Calif.) announced about 18 months ago that he would look into the tax exemption of certain non-profits, using credit unions as an example. However, McKechnie said, “Our best friends on the committee.are saying we need to be on our toes.” However, NAFCU Director of Regulatory Affairs Brad Thaler said he was unaware of anything “new” happening on the tax front. “I don’t think there’s any new tax push on credit unions. What’s been going on all along is what’s continuing to go on,” he commented. He acknowledged that the committee’s focus shifted away from tax-exempt entities while dealing with Social Security reform and other key issues, but it may be a bit more focused now back on not-for-profits’ tax treatment. NCUA’s Executive Director Len Skiles, Director of Congressional and Governmental Affairs Cliff Northup, Examination and Insurance Deputy Director Anthony LaCreta, and General Counsel Bob Fenner, have met recently with Ways and Means Committee staffers. “The agency maintains an open dialogue with Congress on issues of importance to the safety and soundness condition of America’s credit unions. We always look forward to sharing with Congress the service of the nation’s not-for-profit financial cooperatives, as they meet the needs of affordable financial services to Americans from all walks of life,” NCUA Director of External Affairs Nicholas Owens said. “Additionally, senior staff had an open discussion regarding a broad range of issues and how credit unions are fulfilling their statutory purpose.” CUNA held a conference call recently on the matter. The trade association contacted all the state credit union leagues to ask them to rally their credit unions to visit with particular members of Congress during the Columbus Day/Yom Kippur recess last week. “Congress is on break this week,” McKechnie said, “so we are making very good use of the calendar by having our grassroots contact certain members of Congress.” and exchanging information on what might be happening. The major banking trades did not comment on the subject. Still, McKechnie said something could possibly take shape very soon. “There are all these ingredients out there and we’re watching them.” CUNA Vice President of Communications and Media Outreach Pat Keefe emphasized that CUNA would not go to the efforts it is unless they felt the situation was serious. -

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