WASHINGTON – The Internal Revenue Service has begun setting more formal guidelines on taxable practices for state chartered credit unions under its Unrelated Business Income and credit unions are protesting. In Technical Action Memoranda sent to credit unions in Alabama and Connecticut in recent days, the IRS ruled that net income earned on a variety of insurance products, including credit life disability, health, dental, as well as on annuities and on ATM fees earned from non-members is taxable under UBIT, according to CUNA, which has reviewed the long-awaited rulings. But CUNA, which has been negotiating on UBIT guidelines for decades, believes the IRS is misguided and that those listed activities should be non-taxable as essential parts of the delivery of services to its members, according to CUNA General Counsel Eric Richard, who predicted a legal challenge to the rulings. “We believe we are going to have to file litigation,” Richard told The Credit Union Journal yesterday. More than a dozen credit unions in the two states have received notices for payment of taxes dating back as far as 1999. Federally chartered credit unions, defined as instrumentalities of the federal government, do not pay UBIT.
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Beth Johnson, a self-described math geek, is driving the bank's ESG strategy and training its employees to keep pace with industry trends.
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The Cleveland-based bank is projecting steady growth in net interest income even as credit losses remain manageable. But Chairman and CEO Chris Gorman also said that he thinks a recession is likely.
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The Detroit-based company is exploring ways to make more consumer auto loans without running afoul of stricter capital standards that are expected from the Federal Reserve. Possible approaches include more securitizations and the use of credit risk transfers.
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The House Financial Services Committee also sent to the full House two bipartisan bills, including one that would prevent large banks from opting out of having to recognize Accumulated Other Comprehensive Income in regulatory capital.
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Charge-offs and nonperforming loans rose at the Georgia bank in the first quarter. But it blamed the problem on one large client and said the matter has been resolved.
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