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Their regulator has achieved for them by administrative fiat what they have been unable to accomplish in Congress.
August 13 -
The Small Business Lending Enhancement Act would let credit unions help small businesses and our economy without costing taxpayers a dime. Whether lifting the cap creates one job or 1,000, it would be a success.
August 1
The credit union lobbyists are in
The bipartisan "Blank Slate" tax reform proposal that has been initiated by the Senate Finance Committee and the House Ways and Means Committee has finally put this outdated tax exemption in the proper perspective. Should we raise taxes on every business in America so that a handful of highly profitable financial institutions can continue to retain profits and grow tax-free? Of course not!
Let me explain. The "Blank Slate" approach to tax reform starts by eliminating all tax exemptions, deductions and loopholes and uses that money to lower tax rates across the board. Then every exemption, deduction and loophole is scrutinized to determine whether or not it should be added back with the understanding that tax rates will have to be increased to offset the lost revenue. In other words, Congress would have to agree to raise tax rates on everyone else in order to preserve the credit union exemption.
So you can see why the credit union lobbyists are panicked. Their main talking point
The irony here is that they are talking about taxing the money a credit union does not give back to its members. If the credit unions lose their exemption, Subchapter T of the Internal Revenue Code would only require them to pay income taxes on the profits they retain from their members to grow and expand. Most credit union members have no idea that as soon as their credit union retains those profits, they are lost to the members forever (unless the credit union is liquidated). Maybe if Congress does the right thing, and lowers taxes on everyone else by eliminating this outdated loophole, credit unions will start giving back more of their profits to their members in order to avoid taxation.
Some credit union lobbyists are telling Congress that without the exemption, the credit union industry
Credit union lobbyists are struggling to motivate their troops because they can't blame this whole debate on the big bad banks. This isn't a fight between banks and credit unions. It is a policy discussion about how to stimulate the economy through pro-growth tax reform and get our country on a path toward a balanced budget something most credit union members agree with.
The credit union tax exemption is the perfect litmus test to gauge how serious Congress is about tax reform. There is no legitimate tax policy justification for keeping the exemption. State and federal courts have repeatedly ruled that credit unions have expanded well beyond their statutory membership limits. They basically serve the general public like a bank. They have started making big business loans, and they
Additionally, the
The primary reason I support meaningful tax reform is because I believe it is the only way to grow the economy, create jobs and achieve the deficit reduction America needs. I hope Congress will have the courage to stand up to every special interest that lobbies to save its sweetheart tax deal in order to lower taxes on everyone. Every American, not just bankers, has an interest in
Howard M. Headlee is the president and CEO of the Utah Bankers Association and a member of the steering committee of Fix the Debt Utah.