A key committee in the state Assembly made fast work last week of another credit union tax bid, neglecting to vote on the bill and thereby relegating it to the dustbin, at least for this year.
The bill, which would have studied a possible tax or fee on credit unions, as well as the potential for some kind of Community Reinvestment Act for state charters, failed to garner enough support in the Assembly's Banking Committee, which agreed not to put it to a vote. "In any case, it's gone for the year," said Bob Arnould, chief lobbyist for the California CU League.
It was the fourth tax bid defeated by credit unions so far this year, counting initiatives in Utah, Iowa and New Mexico that went down to defeat earlier. A tax bill is still pending in Oregon, albeit with little legislative support.
Still, the California threat, just like those in the other states, is expected to resurface in the future, perhaps next year. The California bill, according to Arnould, has a two-year life, enabling the chief sponsor to collect more support and bring it back next year. The California league, however, has agreed to work with the bill's sponsor, Rep. Cindy Montanaez, on some of her concerns, including bringing more CU services into low-income communities in order to reduce her ardor for the tax study.
A separate bill introduced in the state Senate would expand credit unions' abilities to serve low-income communities in several ways; create a state designation, much like NCUA's, for low-income credit unions and make them eligible to offer secondary capital instruments; allow mainstream CUs to add low-income communities to their FOMs, just as NCUA allows FCUs to do, as well as to offer secondary capital instruments.
The low-income definition in California would be broader than NCUA's, taking into consideration that California has a higher average income than the national average. The Senate Banking Committee is expected to hold a hearing on the low-income credit union bill in the next few weeks, according to Arnould.
In an effort to expand financial services to California's millions of immigrants, the bill would allow all credit unions using the low-income designation to provide certain services, like check cashing and money transfers, to non-members within their FOMs.
Such a measure, which is gaining popularity among credit unions, was approved in New Mexico this year for all state-chartered credit unions.
