ABA Troubled by Snow's Support of CU Tax-Exemption

WASHINGTON- American Bankers Association President and CEO Ed Yingling wrote Treasury Secretary John Snow to express their concern regarding his remarks during CUNA’s Governmental Affairs Conference in support of the credit union tax-exemption. “Last March, when you were kind enough to speak to the ABA Spring Summit,” Yingling wrote in a March 3 letter to Snow, “you said in response to a question: `The tax-exemption first was intended to foster traditional credit union activities where the credit union served a distinct role. The tax-exemption would be put in jeopardy if the credit union was no longer faithful to that charter.’ This statement was very well received by our bankers. ABA believes strongly that it is clear that a number of credit unions are, in fact, `no longer faithful to that charter.’ As a result, we believe their tax-exemption should be eliminated or they should convert to a bank charter.” Since Snow’s speech to the ABA last year, Yingling pointed to “a number of developments” on credit union expansion. He highlighted the recent large credit union conversions to mutual savings banks and the Ways and Means Committee hearing in November where it was shown that “NCUA has no way to measure whether individual credit unions are doing what Congress intended.” NCUA is currently working on such information gathering, Yingling said. He added that he agreed with Snow on his points during his GAC speech about fighting terrorist financing, the importance of financial literacy, and expanding Health Savings Accounts.