Warning Shot: ICBA Launches Credit Union Tax Effort

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It wouldn’t be a day that ended in the letter "Y" if the banks were not plotting something against credit unions.

Earlier this week, the Independent Community Bankers Association (ICBA) launched a grassroots alert, including yet another website aimed at educating elected officials about the “dangers” of the credit union tax status.

This coincides with other bank efforts to bring about legislation in Congress and in some state legislatures to tax credit unions. To date in Congress, no bill has been introduced, no committee has expressed interest in taxing credit unions, and no true bi-partisan workgroup has given any indication of advancing a proposal.

“What we have here is two things: First, the political climate in Washington, D.C. has stalled progress on many fronts, leaving the banking lobby with little agenda to advance; and second, an association in need of providing value to a membership that is spread between three or four other banking lobbies,” said Jeremy Empol, vice president of federal government affairs for the California and Nevada Credit Union Leagues. “If the banks were acting tactically, they’d do so quietly and try to inflict as much damage as possible without creating another banks-versus-credit-unions fight. Credit unions, however, have chosen to move forward with our agenda of updating the Federal Credit Union Act and securing consumer data.”

In recent months, several high ranking members of Congress, including those on the Senate Finance and House Ways and Means committees (which govern tax policy), have indicated that banks have been more aggressive in their messaging on the credit union tax status. Those members of Congress have informed the Leagues and the Credit Union National Association (CUNA) about bank efforts while reiterating their support for credit unions.

There should be an immediate course of action and appropriate response, according to Leagues President and CEO Diana Dykstra.

"We should never be complacent, and the more the banks try to tax us, the more it makes any issue we want to advance toxic," Dykstra said. "We must always push back and do so appropriately by including the direct and indirect benefits of credit union membership. The answer is somewhere between analytical and anecdotal information about the value to the community. This is the foundation for beating them back in this new fight. For now, at the least, credit unions should be regularly communicating this message to Congress.”

Credit union supporters wishing to contact their members of Congress about the issue can always send an email at www.connectforthecause.com, the Leagues’ website that direclty connects to elected officials.

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