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WASHINGTON-In an attempt to thwart credit unions’ efforts to pass the Credit Union Regulatory Improvements Act (H.R. 2317), American Bankers Association Chairman Harris Simmons is summoning the banking community’s grassroots to follow up on Capitol Hill visits with letters opposing the bill. “For years, bankers have been concerned that credit unions continue to be tax-exempt despite their significant growth and constant pushing for more,” he wrote in an April 10 letter to all bank CEOs. “Few of you thought you would see that change anytime soon. But I believe we are nearing a tipping point on this issue. The outcome will ultimately depend on our ability to generate grassroots support for our position.” Simmons continued, “Last November, the House Ways and Means Committee held a hearing on credit unions that was quite remarkable. The panel asked questions focusing on whether credit unions deserve a continuation of their tax subsidy when their fields of membership have greatly expanded. NCUA’s chairman, who appeared before the Committee, was clearly uncomfortable being on the hot seat without any good answers.” The head of Zions Bank suggested that credit unions that act like banks should convert to banks. “We’re going to be spending a lot of time in the next several weeks to make sure credit unions are aware of what the banks are up to,” CUNA Senior Vice President of Political Affairs Richard Gose said. NAFCU Director of Political Affairs Murray Chanow was unimpressed by the effort, stating that he and Hill staffers will only be hearing the same old stale arguments from the bankers. “Harris Simmons is concerned with one thing and that is making a profit,” he said, pointing to Simmons’ remarks last year that Zions’ profits would have been higher if it were not for competition from credit unions. “His problem is not with credit unions expanding their services but about his own wallet.” CURIA already has 119 co-sponsors, but if the bill does not become law-either on its own or as part of an overall regulatory relief package-credit unions will have to start all over again on co-sponsors in the 110th Congress. CURIA includes a few provisions that are not currently part of the regulatory relief package in the House and not expected to be in an original version of a bill that is expected to be marked up in the Senate Banking Committee in May. Simmons, a regular credit union antagonist, explained that halting CURIA is part of the ABA’s short-term strategy to achieve the long-term one of eliminating the credit union tax-exemption. “While many bankers wrote letters against CURIA last year, we must redouble our efforts now, because a hearing will be held in the House Financial Institutions Subcommittee this spring,” he said. “CURIA would weaken credit unions’ capital and substantially increase their business lending authority. If we bankers don’t communicate our strong opposition, the bill will be much harder to defeat.” Simmons said that bankers scoured the Hill during a recent leadership summit to push their opposition to CURIA and now the masses need to “finish the job.” The letter even has a link to ABA’s Web site (www.aba.com) where banks are urged to “Contact Congress Now.” The form letter has “required” text, which reads in part, “The new powers these aggressive, bank-like credit unions seek would take them further from their congressionally mandated mission, which is to serve low- and moderate-income individuals. It is because of this mission that credit unions were given an exemption from federal income tax. Several studies have shown banks are doing a better job of serving such individuals than credit unions, despite the credit unions’ tax exemption. “I am concerned about the ability of my bank, and others like it, to maintain a competitive position. If Congress allows credit unions to become, essentially, untaxed banks with no community reinvestment obligations, banks and their communities will suffer. “Giving even more powers to credit unions that aren’t fulfilling their original mission doesn’t make sense. Please do not cosponsor H.R. 2317. Tell nontraditional credit unions to refocus their attention on their original mission.” [email protected]

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