The long-awaited working group report to the House Ways andMeans Committee on tax reform, released Monday, is a mixed bag forcredit unions.

On the one hand, the report from the Working Group onCharitable/Exempt Organizations summarized the input it received tobe overall in favor of retaining the credit union taxexemption.

And, the Working Group on Financial Services reportedsubmissions it received suggest Congress should retain thetax-exempt status for credit unions. However, a list of groupssubmitting comments for the report did not include the IndependentCommunity Bankers of America or the American BankersAssociation.

On the downer side, the report included recommendations toeliminate the credit union tax exemption from a May 2011 reportfrom liberal think tank Center for American Progress and the President's EconomicRecovery Advisory Board report of 2010, which also advocatedfor the elimination of the credit union tax exemption, was alsoincluded.

In a section that describes current tax law under scrutiny, thereport also made an ominous statement about the credit unionexemption, saying “while significant differences between the rulesunder which credit unions and banks operate have existed in thepast, most of those differences have disappeared over time.”

Ways and Means Committee Chairman Dave Camp (R-Mich.) andRanking Member Sander Levin (D-Mich.) said in a joint statement,“This document provides an important and comprehensive overview ofthe tax code, an overview of some of the most commonly referencedprevious tax reform proposals and summarizes the views of more than1,300 submissions offered to the Ways and Means Committee by keystakeholders. The committee will dig into its details over thecoming weeks.”

CUNA Executive Vice President of Governmental Affairs RyanDonovan said upon first review, the report doesn't appear to shed alot of light as to what could be included in tax reformlegislation.

However, Donovan said he's heard from staffers in the Senate andthe House that Congress may use tax reform as a bargaining chip inanother debt ceiling increase that has to be hammered out bySeptember. Republicans oppose an increase, but are pushing for taxreform.

“It's a political move, no doubt, but it gives them a bit ofleverage in the process,” he said.

Donovan said House Ways and Means Committee leadership hasspoken out on record saying they want to pass a tax reform bill inthe House by the end of July, which he said coincides with thetiming the House would begin debt ceiling debate.

“They might even start later this month,” he said.