FOR IMMEDIATE RELEASE
Tax-Exempt Credit Union Industry Warrants Congressional Scrutiny
Washington, D.C. (April 20, 2005) - The Independent Community Bankers of America (ICBA) applauded Ways and Means Committee Chairman Bill Thomas (R-Calif.) for conducting an important hearing today to review the tax-exempt status of credit unions and other organizations.
In a written statement to the committee, ICBA praised Congress for re-assessing the tax inequities posed by the increasingly aggressive business activities of the rapidly growing $655 billion tax-exempt credit union industry today.
ICBA has asked Congress for years to reassess the tax-exempt status of large bank-like credit unions, and today's hearing is a good step toward achieving more equitable public policy in this regard. New independent research by the nonpartisan Tax Foundation estimates a $31 billion tax loss to the U.S. Treasury from the credit unions' special tax subsidy over the next 10 years, yet the study finds no evidence the industry better serves low and moderate income people-a prime reason for the tax subsidy.
"Now more than ever, Congress needs to re-evaluate the tax subsidy granted credit unions," wrote ICBA Chairman David E. Hayes, president of Security Bank in Dyersburg, Tenn., in the statement to the committee.
In announcing the April 20 hearing, Chairman Thomas stated, "Tax-exemption is an important benefit, and the Congress has a responsibility to oversee and assure the American taxpayer that the tax-exempt sector is living up to its legal responsibilities."
"Today more than 100 mega-credit unions each have $1 billion or more in assets," Hayes wrote. "These tax-free institutions often supply wealthy and middle-income members with financial services, offer a wide range of sophisticated banking products and business loans, competing directly and aggressively against taxpaying community banks. Yet these same institutions don't pay taxes and don't bear the same regulatory burden as community banks. We value the ongoing work of the Ways and Means Committee and urge that greater equity and parity can be achieved in the tax code between tax-exempt credit unions and taxpaying community banks."
For a copy of ICBA's statement visit www.icba.org/pressroom, and click on "Letters to Capitol Hill."