WASHINGTON-CUNA is asking Treasury Dept. officials for a meeting, claiming the different treatment being afforded banks and CUs in the current environment is dramatically different.
In a letter to Treasury, CUNA President Dan Mica noted that banks are being granted tax relief at the same time state-chartered CUs are fighting IRS claims over the unrelated business income tax.
Mica said that recent IRS decisions, stemming from the meltdown in the financial markets, have greatly enhanced "the ability of banks to shelter income by using losses incurred by other banks with which they merge." Mica added such efforts have the potential to "shelter billions of dollars of income to such institutions as Wells Fargo and JP Morgan Chase, which announced major acquisitions of troubled banks."
Meanwhile, Mica said, "the IRS has been aggressively reinterpreting existing law to increase the tax liabilities of state chartered credit unions, leaving less funds for them to lend. This harsh position has imposed substantial burdens on CUs, diverting funds which might better be used to provide loans to consumers."
