It was hard for attendees of CUNA's annual GAC to pay attention to the congressional leaders who trudged to the podium to address them last week. That's because of all the drama surrounding CU taxation among states (see related story, page 1).
Congressional leaders from the chairman to the House Financial Services Committee to an influential member of the Senate Banking Committee to credit unions friends on the left and the right said all the right things like, "We're not going to touch your tax exemption."
Of course, those leaders have no control over the assault on credit unions being mounted in the states, where new taxes and fees are being considered.
The interesting thing in some of these cases, all of which have the bankers behind them, is it is not necessarily the growing fiscal crisis in the states driving them. The bankers are just using the budget deficits in states like Utah, Iowa and elsewhere as convenient cover for the decades-long aversion to credit unions, especially the tax exemption.
The American Bankers Association insists that the decision to attack credit unions in the states did not originate with them or in their Credit Union Task Force, long a planning tool for taking on credit unions. The impetus this time, they insist, has come from individual bankers and their state lobbying groups. This despite the fact that several of the recent attacks on credit unions have taken similar approaches, that is, they are targeting large credit unions operating in multiple counties. In fact, the new bill introduced in the New Mexico legislature is very similar in wording to the one in Utah.
One long-time veteran of the financial services arena points out that this is the same kind of strategy the bankers used successfully to reign in the savings and loans, once considered major competitors of the community banks.