Ways and Means Committee Schedules CU Tax Hearing

WASHINGTON-Though not publicly announced yet, the House Ways and Means Committee has slated a hearing on the credit union tax exemption. According to CUNA President and CEO Dan Mica, Committee Chairman Bill Thomas (R-Calif.) has scheduled a hearing for Nov. 3. Staffers for committee members have been told to begin prepping their bosses for the event. The Treasury Department was informed to begin preparing about a month ago, according to Mica. An official witness list will not be available until after press time, but sources within the credit union community have said that they expect the NCUA, IRS, and Government Accountability Office to be on it. “That’s what I hear,” NAFCU President and CEO Fred Becker said, “but it hasn’t been announced yet so the committee reserves the right to change that.” Mica pointed out that the hospital associations were not included in the hearing on their tax exemption. CUNA and NAFCU both plan to submit written comments for the record. Becker said, “We expect many others will as well.” Though he would not name names, he said NAFCU has been working with several groups whose members would be “adversely impacted by taxation of credit unions;” some have had draft comments ready to go for more than a year. “I’m confident Mr. Thomas will hold a fair hearing,” Becker added and will take all comments into consideration. “CUNA and the leagues are ready,” Mica stated. “We are implementing a plan to ensure lawmakers hear a strong message from credit unions about why the tax status continues to be justified. Because credit unions are not-for-profit financial cooperatives, legislators need to know a tax on credit unions is a tax on 87 million Americans. Legislators need to understand how a new tax on credit unions would impact their constituents who are credit union members.” Predictably, the Independent Community Bankers of America applauded the hearing. “Now more than ever Congress needs to re-evaluate the large and growing tax subsidy granted credit unions,” ICBA President and CEO Camden R. Fine said. “Recent independent research by the nonpartisan Tax Foundation estimates a $31 billion tax loss to the U.S. Treasury from the credit unions’ special tax subsidy over the next ten years, yet finds no evidence they used this tax subsidy to better serve low and moderate income people – a prime reason for their special tax status.” He added, “Congress should also be alarmed with the rapid expansion of tax-exempt credit unions into commercial lending and their aggressive pursuit of even greater powers under the guise of regulatory relief.” [email protected]