Credit unions must win the hearts and minds of voters and lawmakers alike if they expect to preserve the tax exemption at the state level. And doing that, according to state leagues that have already faced such fights, is going to require CUs to get their message out on a number of different fronts: philosophical, factual and political.
While the American Association of Credit Union Leagues' Annual Meeting had any number of important issues to discuss-best practices for generating and using Community Investment Funds, credit union conversions to bank charters, predatory lending, to name a few-the hot topic, unquestionably, was about fending off bank attacks on the CU tax exemption.
"The tax issue is a dangerous issue," said CUNA's Richard Gose. "It's not like other legislative issues because it doesn't have to follow the typical legislative process. It can be tacked on at any time and slipped under cover of darkness."
And while members of Congress have repeatedly told credit unions that the federal tax exemption is safe, Gose and other credit unionists believe the banking industry is seeking a victory in one or more states in order to bring the issue back before Congress at a later date
"As a Baptist, I like to say we're doing the Lord's work," said Greg Blount, CEO of Tropical FCU and chairman of the Florida CU League. "We expect a difficult year for Florida. The banks are busy saying we're the reason Florida's children aren't educated. If only we were taxed, there would be enough teachers and enough classrooms and all of Florida's education problems would be solved."
But no amount of the "Lord's work" will help preserve the CU tax exemption if those messages fall on deaf ears, and the only way to make sure someone in power is listening is to become a part of the process.
"Political advocacy is a year-round endeavor. In 1990, there was a banker running against a teacher for our state legislature," recalled Iowa CU League's Pat Jury. "We met with the teacher, and she said she would give us a fair look. We saw this as an opportunity race for us. We stuffed envelopes and did door-to-door drops. We helped get her elected, and she eventually served on the Senate Ways and Means Committee and the Commerce Committee, two committees that were very important to credit unions. And then (Joann Johnson) was appointed to the NCUA board. So sometimes, when you get in on the front end it really pays off. But you also have to balance that with opposing an unbeatable candidate and then facing that candidate's wrath when the race is over."
Beaten In Both Houses
In recounting the tax fight Iowa's credit unions faced last year, Jury noted that while the league was able to delay the tax bill's progress, the fight is far from over.
"[The bankers] beat us in both houses. We should have been able to stop this in the drafting stage. Instead, the bill is still alive," he related. "If we'd had just one strategic advocate in the statehouse, we could have headed this off. From now on, we will be in the business of changing elections. We will never be as strong as we need to be until we have strong, strategic advocates among our lawmakers."
