The nation's banking industry continues to work on the House Ways & Means Committee to ensure that the credit union tax exemption is at least studied, even if the committee members have shown little interest in it. Questions provided by the bankers to committee members and obtained by The Credit Union Journal illustrate the bankers' approach.
The banking lobby actually planted several questions with committee staffers and asked that they have their bosses ask them during the hearing. Though none of the members actually did so, they bear the obvious imprint of the bankers, as the credit unions have heard them all before.
For instance: the bankers wanted a committee member to ask the head of the Government Accountability Office, David Walker, who testified during the hearing, whether the GAO has found in its recent studies of credit unions whether credit unions continue to "meet the financial needs of persons of modest means as compared to banks and savings association," and "how credit unions compete with taxpaying financial service providers given dramatic expansions in asset size, fields of membership, and product and service offerings?"
The bankers also urged that a committee member asks Congressional Budget Office Director Douglas Holtz-Eakin "Should credit unions remain tax, exempt even though other cooperatively owned financial institutions (mutual savings banks and savings associations) do pay federal income tax, particularly those credit unions that operate like these other mutual financial institutions and offer the same services and products as these other mutual financial institutions?"
While the bankers got no takers-none of the committee members agreed to ask the questions-they did succeed in planting these questions among the staff and others who will be studying the continued justification of tax exemptions, opening the door just a little more on their long-sought goal of repeal of the credit union tax exemption. And that was their goal for these hearings.
As one credit union lobbyist noted when discussing the glacier-like pace of congressional action, with respect to banking issues, it took almost 30 years for the bankers to succeed in getting Gramm-Leach-Bliley (repeal of the Depression-era Glass-Steagall Act separating commercial banking from investment banking).
The point he was making is the bankers are in it for the long haul.
