CU Trades Blast Volcker Report
WASHINGTON-The credit union trade groups have moved quickly in response to a small provision within a new report that examines the federal revenue implications from eliminating the credit union tax exemption.
The report, from the Presidential Economic Recovery Advisory Board, which is also known as the Volcker Commission after its chairman, Paul Vocker, analyzes various tax options. Under the subhead, "Eliminate Other Tax Expenditures," the federal corporate income tax exemption for CUs is discussed. The report emphasizes that it is only presenting options, not making recommendations. CU trades were quick to respond.
"The inclusion of the credit union federal tax exemption is not unusual in reports such as these that tend to take note of every possible revenue option under the sun," said CUNA CEO Bill Cheney. "We do not believe the Administration or Congress has any desire to raise taxes on 92-million hard-working Americans by altering the tax status of member-owned credit unions, especially in the current economic environment. And nothing at all has changed about the reason credit unions are exempt from federal taxation: their structure."
NAFCU CEO Fred Becker sounded a similar theme. "Taxing credit unions would do grievous harm to the many lower-income families that rely on credit unions for their basic financial services," Becker said. "This proposal runs counter to the president's objective of not overburdening taxpayers, particularly those who are struggling to survive in these challenging economic times."