NAFCU Blasts NASCUS Over Anti-Tax Lobbying
In an extraordinary letter that underscores the ongoing antipathy between credit union lobbying groups, NAFCU disparaged recent congressional testimony by NASCUS over the unrelated business income tax, known as UBIT, and insisted that NASCUS clear any future lobbying on federal tax matters with NAFCU.
"Our concerns stem from the fact that, although perhaps unintended, the NASCUS submissions have the potential to bring to the public forefront the UBIT issue, as well as divide the credit union community," wrote outgoing NAFCU Chair Diane Furnas in a June 28 letter to NASCUS Chair Roger Little, obtained by The Credit Union Journal. The letter refers to written comments on UBIT NASCUS submitted to the President's Advisory Panel of Federal Tax Reform on April 29, then to the House Ways and Means Committee, which is investigating tax-exempt institutions.
The credit union trade groups had agreed among themselves to keep tax issues like UBIT and the federal tax exemption at a low level of visibility, so as not to raise the attention of congressional tax-writers or fuel the tax efforts by the banking lobby.
In addition to NAFCU's concerns about NASCUS' comments bringing the UBIT issue to the forefront during a critical time, Furnas also pointed to the need for all of the CU trade associations to be on the same page.
"Our concerns are magnified by the fact that it had been our understanding, and we believe that of others in the credit union community, that we were to work quietly to resolve UBIT issues through discussion and negotiation with the Internal Revenue Service, rather than raising or elevating the profile of the UBIT or federal income taxation," Furnas wrote in her letter to Little.
The conflict emphasizes the differences between the two trade groups on several issues. For NAFCU and its members, UBIT is not an issue because federally chartered credit unions are exempt from the tax. Likewise, the push by NASCUS and CUNA for legislation that would allow privately insured credit unions-all federal charters must be federally insured through NCUA-eligible for membership in the Federal Home Loan Bank System. NAFCU generally opposes this provision. The two groups have also tangled in the past over the overhead transfer rate NCUA transfers funds from the NCUSIF to finance its annual operations.
In an unusual request, Furnas said the NAFCU Board insists that NASCUS refrain from "initiating any further contact with either (the president's tax panel or the Ways and Means Committee) regarding any issues related to matters affecting federal credit unions," and to inform NAFCU within the same business day of any contacts with representatives of either of the two panels on credit union tax issues.
Representatives from the two lobbying groups refused to comment on the board-to-board communication.