The Independent Community Bankers of America (ICBA) is requesting that the Senate Finance Committee hold a hearing on the credit union industry’s tax-exempt status.
In a letter to committee chairman Sen. Orrin Hatch (R-UT), ICBA officials said credit unions not fulfilled their public mission and pose a threat to the American tax base.
“Today’s credit unions are virtually indistinguishable from tax-paying community and regional banks,” ICBA President and CEO Camden Fine wrote. “It is widely understood but rarely acknowledged that the tax exemption has outlived its purpose. Now is the time to have that discussion.”
Fine expressed concerns that credit unions have strayed from its mission to serve people of modest means with a “common bond.” He supported the concerns Hatch expressed about credit unions in a recent letter to CUNA.
Senate Finance Chairman Orrin Hatch (R-UT) to the National Credit Union Administration (NCUA) expressing concern that credit unions may be operating beyond their tax-exempt purpose.
“ICBA thanks Sen. Hatch for speaking out against the tax-exempt credit union industry, which for too long has enjoyed the benefits of competing with tax-paying community banks,” Fine wrote. “Sen. Hatch’s comments echo ICBA’s belief that the credit union model has become outdated and that its charter, purpose and tax-exempt status should be reviewed by Congress.”
Community banks are united in their opposition to the credit union industry’s federal tax subsidy and what they say are NCUA’s attempts to expand the powers of tax-exempt credit unions beyond their statutory limits.