FORT LAUDERDALE, Fla. — What the credit union movement needs isa few good plaintiffs, Larry Blanchard said to NASCUS attendeeshere for the organization's State System Summit.

Blanchard, senior vice president of CUNA Mutual Group, and chairof the industry's Unrelated Business Income Tax Steering Committee,said the committee would continue to seek an administrativesolution to the issue, and will try to work with the IRS to changeits decision. But if that fails, state-chartered credit unions willhave no option other than to rid themselves of the UBIT threat bymaking a court challenge to the IRS. That will require several thatare willing to step forward.

Blanchard said the IRS backed off the inclusion of debit andcredit card interchange fees, check printing and collateralprotection insurance, but the likelihood of the agency changing itsmind altogether on taxation is slim. “The IRS has reached somewrong conclusions on credit union activities and the next step isto seek redress through the courts and challenge the agency'smisguided reasoning. It will take credit unions' cooperation for itto be successful,” he stated.

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