According to reporting by CU Journal, earlier this month a Kansas state Senate committee met to SB.238, which would decrease the state income tax on banks, and also SB.239 to tax credit unions over $100 million in assets. Both bills were crafted by the Kansas Bankers Association.
On Tuesday of this week the 11-member committee voted to “not recommend” the credit union tax bill and decided to make “no recommendation” on the bank tax bill. Instead, the Kansas legislature called for more research data on the topic. The Kansas legislature's decision on the credit union taxation bill was a win for the the Heartland CU Association and the entire industry.
The CU association said that banks want a double standard in the form of creating a loophole so they can be taxed like not-for-profits without having to play by the same rules as not-for-profits. In its testimony, the association highlighted economic factors, including that banks control 99% of the commercial market in the Sunflower State.
Credit unions may only account for 1% of the commercial market, says the Association, but that includes small businesses and farmers that banks aren’t willing to take a chance on. It also argued that Kansas has lost 244 credit union charters in the past five decades, declining from 322 credit unions in 1969 to 78 credit unions today.
The battle in Kansas is the latest banker state-level attempt to impose taxes or restrictions on credit unions. In February, the Nebraska Banking, Commerce and Insurance Committee considered a bill that would have required state regulators to notify banks whenever a CU applied to expand its field of membership. An in 2018, an effort to tax Iowa credit unions ultimately failed, but two credit unions were forced to change their names to comply with legislation that prohibits Iowa credit unions from using the name of state universities in their own name.
Read the original CU Journal article.
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