Bankers Call for CU Tax Again, Calling a Cheerleader Posted by Association of Vermont Credit Unions on 3:16 PM

As reported by CU Times, the Independent Community Bankers Association (ICBA) on Monday renewed their call for Congress to re-examine the credit union tax exemption in an effort to “promote a level playing field” for financial institutions.  The ICBA released its “Community Focus 2020” legislative agenda in which it singled out credit unions and the NCUA for criticism.  In the report, ICBA claims . . .

Today’s credit unions are leveraging their tax subsidy for rapid growth, purchasing multi-million-dollar stadium naming rights, flaunting their nearly unlimited fields of membership, and expanding their activities well beyond their original mission.  ICBA continues to oppose attempts by the NCUA to flout statutory limits and liberalize restrictions on fields of membership, member business lending, and issuing supplemental capital.

The bankers contend that credit unions have become “virtually indistinguishable” from banks.
But having finished a comprehensive tax overhaul effort during the last Congress, the House and Senate may be unwilling to open the tax code for major changes. On the other hand, Congress may make so-called technical corrections legislation making small changes to the bill that was enacted.

In that case, bankers could attempt to convince lawmakers to add credit union provisions to that bill.

The ICBA also said that Congress should:

• subject credit unions to the Community Reinvestment Act
• require greater disclosure of credit union compensation, and
• insure that regulations make it as easy for a bank to acquire a credit union as it is for a credit union to acquire a bank

Ironically, on most other legislative and regulatory issues, the ICBA’s agenda mirrors many of the priorities set by CUNA. For instance, the ICBA called on lawmakers to guarantee that merchants be required to follow the same data security standards that financial institutions must follow and to create a safe harbor to allow financial institutions to serve marijuana-related businesses.