Tax Proposal Prompts CUResponse
WASHINGTON - (06/24/05) -- NAFCU said Thursday it has withdrawnfrom the Democratic Leadership Council after the influentialDemocratic group's think tank, the Progressive Policy Institute,issued a proposal to repeal the tax exemption for the largestcredit unions, those over $10 million, as part of a tax reformpackage. The NAFCU pull-out came after top executives of the tradeassociation met with members of the group in an unsuccessful effortto convince them to retract their recommendation or allow NAFCU togive a written response in the group's monthly magazine, where theproposal was first aired. The NAFCU executives told the group thattaxation would alter the not-for-profit structure of credit unionsby adding additional need to raise capital. A tax would alsoproduce far less in federal revenues than the projected $1.5billion a year because it would cause credit unions to engage intax avoidance schemes similar to those currently used by banks, thecredit union lobbyists argued. The NAFCU decision comes as bothCUNA President Dan Mica and NCUA Board Member Deborah Matzexpressed their opposition to the DLC's recommendation. CUNA wasformerly a member of the policy making group but did not renew itsmembership this year.