Federal Reserve Chairman Ben Bernanke said today that because credit unions are tax exempt, they need to accept certain restrictions on their activities, including a limit on how much member business lending they can do.
He told the House Financial Services Committee that credit unions enjoy a "tax-favored" status and that gives them certain competitive advantages but should be considered before granting other privileges, including raising the cap on member business lending.
"The banks would complain obviously that if credit unions are allowed to do everything banks can do, why are they tax favored? I think that's the trade-off Congress has to consider," Bernanke said in response to a question from Rep. Brad Sherman (D-Calif.)
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