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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Strong loan and deposit growth led to a double-digit increase in revenues and an even bigger jump in profits at the Columbus, Ohio-based regional bank.
October 17 -
Flagstar shareholders approved a plan to merge its holding company into the bank; Huntington tapped a new chief auditor, along with two new business leaders; First Foundation hired a new chief credit officer; and more in this week's banking news roundup.
October 17 -
In a tough quarter for the auto industry, the Detroit-based lender posted earnings that sped past Wall Street's expectations.
October 17 -
Approximately three years after the one-time non-depository bought Roscoe (Texas) State Bank, Cornerstone Capital Bancorp agreed to purchase Peoples Bancorp.
October 17 -
Regional banks say their asset quality is solid amid skittish investors. The KBW Nasdaq Regional Banking Index was largely stable Friday after falling by as much as 7% the day before.
October 17 -
Coordinated sanctions target two networks behind so-called pig butchering scams, human trafficking and money laundering for North Korean cybercrime groups.
October 17