Credit unions are waiting for the other shoe to drop.
The bill to tax credit unions, being explored by one House member is still dangling but has yet to be formally introduced.
Meantime, credit unions are doing their best to dissuade the lawmaker, Rep. William Smith from formally introducing the bill, which has so far been discussed in draft form. "Nothing's changed. It's a bill in title only," said John Murphy, president of the Maine CU League. "The title now needs to be converted to a bill. Credit unions in his district have met with him to talk about it. Our efforts have been to stress the importance of the dual chartering system and to stress all the good works credit unions do in his district."
"He's been very approachable and willing to listen," added Murphy of the state lawmaker, noting the careful balance between trying to persuade a lawmaker and inundating and intimidating him.
The main aim of Smith, who is a member of Norstate FCU in Matawaska, Maine, is not to penalize credit unions, as the bankers would like, but to raise revenues for the state, which is facing a growing budget deficit. In fact, Smith has introduced a separate bill to lift the tax rate on the state's banks for the same purpose.
Smith could not be reached for comment by The Credit Union Journal.
According to the draft of the bill the measure would apply the state's annual franchise (income) tax to Maine's 14 state-chartered credit unions. A fiscal impact study by the league estimates the cost at about $137,000 a year, according to Murphy.
Maine credit unions last faced a tax threat in 1993, which they successfully defeated.
