FOR IMMEDIATE RELEASE
ICBA Urges Congress to Reject Expanded Powers for Tax-Exempt Credit
Washington, DC (March 6, 2008)—The Independent Community Bankers of America (ICBA) strongly urged Congress to reject calls for new business lending powers and reduced capital for the credit union industry.
“Credit unions should be granted no new powers as long as they remain tax exempt and are not meeting their statutory mission to serve individuals of modest means. Enhanced commercial lending authority is inconsistent with this mission,” said Michael Menzies, ICBA chairman-elect and president and CEO of Easton Bank and Trust Company,
Today's credit unions have virtually no limit to their customer base; the statutory “common bond” requirement has become meaningless because many credit unions serve multiple common bonds or have expansive geographic-based “community" charters.” “If some credit unions believe they need new powers, the National Credit Union Administration could better serve credit unions and their members -- and taxpayers -- by facilitating their conversion to tax-paying mutual thrifts,” said Menzies.
“Not only do credit unions have the advantage of being tax exempt but they do not have to comply with the Community Reinvestment Act,” said Menzies. “But if credit unions insist on expanding beyond their basic mission of serving those of modest means, they should pay taxes and comply with CRA, just like community banks.”
Read the full text of ICBA’s testimony at www.icba.org.