The Threat From Preemptions
Could the use of the federal preemption rules put the credit union tax exemption in danger? When NCUA and other federal agencies use the preemption card, it can leave a bad taste in the mouths of state lawmakers-and that's a bad taste that can be associated with credit unions, said one.
"Those who would like to see credit unions taxed could find ways to use that to their advantage," said CUNA's Colleen Kelly. "Instead of talking about whether credit unions should be taxed, they can ask state lawmakers, 'Should Congress control how states assess taxes and raise revenue?' It's awfully tough for a state lawmaker to answer that with anything but 'no.' It's using the federal preemption as a backdoor approach to taxation."