ABA Chair: Time to Fix CU Tax Exemption Posted by Association of Vermont Credit Unions on 12:37 PM

Laurie Stewart, Chair, American Bankers Association

The new chair of the American Bankers Association, Laurie Stewart, thinks it's time for the banking lobby to address the tax-exempt status of credit unions. That's an age-old song by bankers, but what's different this time is that Stewart's $686 million bank used to be a credit union.  Stewart lead the conversion of Sound Financial in Seattle from a credit union to a bank in 2003.

In a recent American Banker article, Stewart cites the recent trend of credit unions buying banks as a frustration and how the ABA plans to address the issue in the year ahead.

Stewart says she's "fired up about this situation with credit unions buying taxpaying community banks and taking them off the tax rolls of communities around the country."  She goes to take exception to a credit union buying a bank's book of business with the assumption there's a common bond that results.  She objects to credit unions offering the same services as banks but not accountable to the Community Reinvestment Act, having less of a compliance burden, and reduing tax revenues for government.

She also claims that some credit union CEOs believe in future credit union taxation and that they'd be better served if they could get their industry to structure a tax and be more in control rather than have to be on the defensive all the time.

Stewart also feels the most pressure from credit unions on commercial real estate, saying that credidt unions make loans in the bank market at incredibly low rates with very generous terms that she believes are not prudent and are not scrutinized at the same level as banks conduct.

See the full interview online.