CUs Seek End To Tax Fight In Iowa
Credit union representatives were negotiating directly with the bankers last week in an effort to come up with a compromise to end the latest effort to tax credit unions.
Legislative leaders had instructed the two sides to sit down and find common ground before lawmakers proceed with bills in the House and Senate to tax the state's largest credit unions. Pat Jury, chief lobbyist for the Iowa CU League, said they hope an offer to make credit unions planning to buy a bank-such as the one that precipitated the latest tax skirmish-pay some kind of indemnity could persuade the bankers to drop their support for the broader tax initiative.
He was referring to this winter's unsuccessful effort by University of Iowa Community CU to acquire Hawkeye State Bank, which set bankers off on their latest effort to add a new credit union tax.
The bank acquisition issue posed as a stalking horse for the bankers' new tax initiative last week when bank-supported members of the House Commerce Committee proposed a bill to tax the credit union-bank purchase, then successfully amended it to include the broader proposal to tax all multiple- county state charters over $150 million in assets.
But Jury said the ruse to bypass the Ways and Means Committee will not succeed in keeping the bill from the tax-writing committee where Chairman Jamie Van Fossum has pledged to defeat the credit union tax.
Representatives of the Iowa Bankers Association, which drafted the credit union bill, said they were open to negotiations and were planning to submit their own compromise proposal to the credit union representatives late last week. "We are talking," said Sharon Presnall, chief lobbyist for the banking group. "We're just in the beginning stages of negotiations. Both of our board's will have to look at any proposals and approve them."
Meantime, said Presnall, legislative leaders are planning to withhold further action on the measure until some kind of deal can be struck.
"We'll see if both sides can come up with a compromise and we'll go from there," she said.
Jury expressed confidence in the credit unions' ability to turn back the latest tax threat. "The legislative leadership does not want to vote on a tax increase for credit unions," he said.
The tax bill would hit the six largest state chartered credit unions, as it is written, assessing a 5% levy on the annual growth in retained earnings stimates for the costs are between $1 million and $1.4 million. The six are: John Deere Community CU, Waterloo; Collins CU, Cedar Rapids; University of Iowa CU, Iowa City; Du Trac Community CU, Dubuque; and Greater Iowa CU, Ames.
Iowa is one of just five states that currently tax CUs, a 0.5% 'Monies and Credit Tax' Iowa's 176 state charters pay on legal and special reserves.