U.S. Rep. Bill Thomas, the outgoing Republican chairman of the tax-writing House Ways and Means Committee, expressed satisfaction with NCUA's recently issued report on credit union services to their members. The report, which cost NCUA an estimated $1.3-million to compile from some 14 million records, was done largely at the behest of the congressional tax-writer, who expressed some reservations last year about whether various non-profits, including credit unions, continue to deserve a federal tax exemption.
Thomas said the NCUA report, which indicated that credit unions are adequately serving their authorized fields of membership, "is a step in the right direction." "This report is a good start in establishing more transparency in the industry; however, I view this as only the first step. The NCUA still has much more work ahead of them with respect to transparency and data collection," he said.
But Thomas, who questioned whether credit unions continue to deserve their federal tax exemption, said the industry trade associations have gone overboard in proclaiming the report a vindication of the industry. "The NCUA and industry associations have overstated the strength of the results of the report, especially those results which lead them to justify expansions of fields of membership," he said. "It would be premature to draw sweeping conclusions from the NCUA's preliminary analysis."
And that was before CUNA, the North Carolina CU League and Wisconsin CU League, among others sent out press releases proclaiming that the report "Shows Credit Unions Are Serving Working Americans."
But Thomas said additional data gathering will be necessary to determine the veracity of the NCUA results, as well as to measure progress.
John McKechnie, who worked with the Ways and Means Committee staff last year as chief lobbyist for CUNA and now as NCUA's congressional liaison, said he was confident the report answered some of the committee's concerns. "Now that this report is concluded, NCUA looks forward to working with Congress to identify ways in which credit unions can build on their solid record of service to their members," he said.
Even with the exit of Thomas, the NCUA report is sure to become political ammunition in the next Congress; for the credit union lobby, which will now use its findings to support its case to allow all credit unions to expand into underserved communities. And for the bankers, who will argue that the findings support their case that credit unions should also be required to comply with the Community Reinvestment Act.
The combative Thomas, who clashed with a broad spectrum, including some of his Republican colleagues and even President Bush, has left the stage after 14 terms in the House. Because of the Democratic wins on election day, Thomas will be succeeded as chairman of the critical tax-writing panel by a Democrat, New York's Charles Rangel. The 76-year-old Rangel has long been an outspoken supporter of credit unions and during last year's hearing defended the credit union tax exemption.
Later this month or early next month, the Government Accountability Office is scheduled to release two additional reports that will fuel the debate over credit unions and whether they serve the underserved. One of the reports, which was conducted at the request of Senator-Elect Bernard Sanders, at the behest of NAFCU, will discuss all of the tax exemptions and subsidies afforded banks and thrifts.
