CUNA Presses For Limited Exemption On Dividends

CUNA hopped on the tax-cut bandwagon and called on Congress to include in its economic stimulus package a limited-income tax exemption for credit union dividends (interest). The credit union proposal falls in line with the Bush administration's bid to eliminate taxes on stock dividends and the bankers' efforts to get savings interested attached.

In a letter to House and Senate leaders, CUNA President Dan Mica said the exemption would help boost savings and investment through both traditional deposit accounts and fixed-income instruments. Mica noted that a limited exemption for both dividends and interest was provided prior to the 1986 Tax Reform Act. "CUNA would enthusiastically support reinstatement and an increase in the amount of this exclusion as it would promote economic growth by increasing savings and investment while putting additional dollars in the hands of consumers," wrote Mica.