NAFCU Urges Treasury To Stick With Position On Tax Exemption

ALEXANDRIA, Va.–The Treasury Department has issued a background paper on business taxation and global competitiveness that calls for the credit union tax exemption to be included on a list of tax preferences that could potentially be eliminated. That led to a quick response from NAFCU, which is urging Treasury to be consistent with earlier statements in support of the tax exemption. "Treasury's inclusion of credit unions on a list of 'corporate' tax preferences is incongruent with public policy goals and contrary to past statements by Treasury officials and President Bush regarding the unique role credit unions play in our economy and the administration's continued support for the tax exemption," said NAFCU President Fred Becker. NAFCU has pointed specifically to a statement by then Assistant Treasury Secretary for Financial Institutions Emil Henry at a NAFCU-hosted event in which he said, "The president recognized the important role that credit unions play and pledged in 2000 to maintain credit unions' tax-exempt status. As I stand here today, I can wholeheartedly say that the administration continues to support credit unions' tax exemption." A 2004 GAO report found the CU tax exemption costs the U.S. Treasury approximately $1 billion per year, versus an estimated $108 billion in tax deductions claimed by the banking industry.