Efforts to retain the credit union tax exemption neared the finish line Friday night, as House and Senate Republican negotiators signed off on a massive tax overhaul bill with the exemption intact.
The legislation is the product of a House-Senate conference committee that met to resolve House and Senate versions of the tax bill.
The conference report will go to the House and Senate floors next week, where it is expected to pass.
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The conference report cannot be amended – it either will be approved or rejected. Republicans have said they believe they have the votes to send the legislation to President Trump, who has said he will sign it.
Since neither the House nor the Senate bill called for removing the credit union exemption, it was unlikely that the conference report would do so.
Adoption of the conference report will conclude the year-long battle between banks and credit unions over the tax exemption.
The final conference report states that the credit union tax exemption is based on credit unions' status as not-for-profit mutual or cooperative organizations established for the benefit of their members.
The members generally must share a common bond, the report states.
"The definition of common bond has been expanded to permit greater use of credit unions," the conference report stated. "While significant differences between the rules under which credit unions and banks operate have existed in the past, most of those differences have disappeared over time."
Credit union trade groups hailed the Republican conferees' decision to retain the exemption.
"Credit unions made their voices heard through every step of the tax reform process that any change to the tax status is unacceptable and amounts to an extra tax on 110 million Americans," CUNA President/CEO Jim Nussle said after the conference report was unveiled.
"The preservation of the credit union tax exemption is vital for the 110 million Americans who are credit union members," NAFCU President/CEO B. Dan Berger said.
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