The 2003 session marked the most concerted effort in years by Iowa bankers to increase credit unions' taxes. Although legislation to tax credit unions with more than $150 million in assets did pass the House and Senate Commerce Committees, the bill did not progress further. 2004 is the second session of our General Assembly, so the bill is technically still alive.
However, legislative leadership does not appear inclined to address credit union taxation in an election year, even though it remains a top priority of the Iowa Bankers Association.
The bankers' legislation would increase taxes on Iowa's six largest credit unions. New revenue to the state would equal about $1.4 million (assuming no charter conversions). Iowa is facing a $336- million shortfall in this year's budget and the bankers have tried to utilize this issue to generate support for the tax. However, given the relatively small amount of new revenue generated by this tax, most legislators don't view it as a solution to the state's budget problems.
Our success this past year can be attributed to a combination of unprecedented grassroots response and frequent communication with legislators (via our members, lobbyists, advertising, direct mail, online advocacy and through the media). During the 2003 session, credit union supporters sent more than 6,000 e-mails and 11,000 handwritten letters to legislators. In addition, 1,000 vocal credit union supporters rallied inside the Capitol to oppose the bill. Our credit unions went a step further and also provided extra support through additional funding of league activities, placing local ads, and organizing persons to attend local legislative meetings.
