HARRISBURG, Pa. — Credit unions and their regulators presented their case before the Pennsylvania Supreme Court yesterday to the bankers' appeal of the constitutionality of the tax-exemption.
On May 14, attorneys representing the state Department of Banking, the state attorney general, Freedom Credit Union and TruMark Financial Credit Union, and the Pennsylvania Credit Union Association made the case that credit unions are constitutionally provided their tax-exemption. The Pennsylvania Bankers Association and several local banks argued that the state constitution is very explicit regarding what entities are tax-exempt and credit unions are not listed among them.
"Our argument is that they're all wet…" PCUA Executive Vice President/General Counsel Rick Wargo said. "You have to read the entire revenue articles of the constitution all together." He added that credit unions in Pennsylvania are not entirely tax-exempt because they are still on the hook for real estate taxes.
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"We felt we put at the feet of the court a very convincing argument," he concluded.
While the Pennsylvania Supreme Court's decision will only directly impact credit unions in Pennsylvania, it could fuel bankers' groups to ramp up their efforts nationwide or dampen them. Wargo pointed out that some other states have constitutions constructed similarly to Pennsylvania's with regard to credit unions' tax-exemption.
There is no timeline for the court to render a decision.
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