ARLINGTON, Va. — If an organization releases a report requested by one Congress after another Congress has come to power, does anyone care?

That is one of the questions NASCUS had to confront as it released the data it collected in an extended survey of how state-chartered credit unions are using their tax exemption. Then House Ways and Means Committee Chairman Bill Thomas (R-Calif.) requested the study in March 2006 and NASCUS took 20 months to complete it. But in those intervening months the California Republican left the Congress, Republicans lost control of both the House and the Senate, and the political climate and agenda had substantially changed.

NASCUS CEO Mary Martha Fortney addressed the question tangentially when she explained at the reports' Dec. 19 release that NASCUS would share its findings with current Ways and Means Committee but avoided reflecting on the report's impact.

“We view that as speculation,” Fortney said, adding that the organization chose to emphasize that it had fulfilled Thomas' request and that state chartered credit unions were serving their members in an effective and meaningful way.

Fortney and other NASCUS staff explained that the comprehensive and serious way the organization undertook the study was the reason it took that long to do. Unlike a similar study that NCUA conducted among randomly selected federal credit unions, NASCUS was requested to use a representative sample of state-chartered credit unions.

This meant NASCUS had to first engage a professional statistician to draw a statistically proper representative sample from which to collect data–a process which took several months. Then NASCUS had to work with regulators from the 47 states that have state-charters, which meant having to standardize the geo-coding and other software from state-to-state that NASCUS would need to meaningfully analyze the data collected, another process of months and expense.

NASCUS divided Thomas' questions into four specific areas: member income, executive compensation, payment of unrelated business income tax, and use of and profit from CUSOs.

Most of the study's findings tracked those from the NCUA study of federal credit unions.

The NASCUS' study found that, on average, 47% of state-chartered credit union members have lower incomes than average in the metropolitan areas and 53% have incomes higher than the average, a finding similar to NCUA.

By comparison, NCUA's 2006 study, based in part on census data, suggested that 60% of all federal credit union member households earned $60,000 or less, 82% earned $75,000 or less, and 96% earned $100,000 or less. NCUA's report said this mix of diverse income levels was crucial to “an economically viable credit union system.”

Predictably, the NASCUS study found that larger credit unions pay their executives more than do smaller ones: average compensation was $48,000 for a credit union of under $10 million in assets and $197, 600 for a credit union of over $500 million in assets.

It also found that state chartered credit unions of all asset sizes invested in CUSOs and that data on state chartered credit unions payment of UBIT was largely unavailable due to lack of guidance on the tax from the IRA at the time NASCUS conducted the survey (See related story, page 30).

“It's really not surprising that credit unions did not file on UBIT since there really was no information on what they should be filing or how,” Fortney said, contending that no organization was going to make any undefined tax moves.

But whatever the strengths or weaknesses of the study results, changes in legislative personalities and legislative agendas that have taken place since it was requested will likely diminish its impact, according to both credit union and banking lobbyists.

“I just don't detect any appetite on the part of [House Ways and Means Committee] Chairman [Charlie] Rangle to address the issues that led to the report,” said Brad Thaler, NAFCU's director of legislative affairs. “The chairman already knows about these things and I don't expect him to take it up.”

Ryan Donovan, vice president of legislative affairs for CUNA, agreed. “The member who originally requested the study has retired and the party that controls the committee has changed,” he said. Nevertheless, “I think it's good that the report was done,” Donovan added. “I think with the similar reports from the Government Accountability Office and the NCUA this report from NASCUS completes the circle.”

Interestingly, Keith Leggett, senior economist with the American Bankers Association, also agreed that the report would not have much impact. The ABA's perspective is that the report finds that state-chartered credit unions by and large do not serve lower-income Americans as much as they should.

Be that as it may, “I think the most important thing about the report's impact is that the member who requested it has since left the Congress,” Leggett said, and he suggested that Thomas' departure may be even more important than the change in congressional control from Republican to Democrat.

–dmorrison@cutimes.com

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