NAFCU President/CEO Fred Becker believes a tax on credit unions would raise concerns for the three `S's': safety, soundness, and service. “If they taxed income at the corporate [level].it would raise safety and soundness concerns,” said Becker. “That's not saying that credit unions would not take some tax avoidance measures, which every American does.” In addition, said Becker, “It would put severe restrictions on their ability to serve their members.” Credit unions would have to raise loan rates, lower savings rates, increase fees, and provide fewer services; basically, they would be unable to grow, he stated. “Under those circumstances, there would be a mass exodus to banks. That would be the smart business decision for them,” Becker, who holds an MBA, concluded. The situation would be a big hit to consumers since credit unions are there to provide competition and tame the banks' insatiable appetite for fees. “The other part that needs to be appreciated is that credit unions operate as a system,” he said, pointing to the nationwide response to aid the people and credit unions hit hardest by Hurricane Katrina. “That would be the demise of the system as a whole.” He also pointed out that the banks' push to tax credit unions could come back to bite community banks. “If they tax credit unions, they're not going to leave Subchapter S alone. The community banks are going to be directly and adversely impacted by that,” Becker suggested. “I don't see any benefit to the American consumer at all,” he said. “I don't see any positive at all other than banks making more money.” Documentation of service to those of modest means was linked to the tax-exemption at the Nov. 3 Ways and Means hearing but Becker asked, “What are we trying to document? Credit unions do that every day by the competition they provide to banks.” He also noted that the statute says credit unions exist to make more credit available to those of small means but not exclusively.