Utah Appeal to Congress on CUs
The Utah House of Representatives has passed an unusual resolution calling on Congress to let the state tax federal credit unions.
It was initiated by lawmakers angry about a 2003 end run around a bank-backed bill that would have let Utah tax state-chartered credit unions with more than $100 million of assets. Many of the largest of them simply converted to federal charters.
House Resolution 1, passed last week and sent to the state Senate, asks Congress to weigh in on ending state tax exemption for federally chartered credit unions and encourages it to differentiate between traditional credit unions and those that have lost "a meaningful affinity or bond."
There is little chance that the resolution, even if it passed the state Senate, would generate action in Congress, which has little enthusiasm for getting involved in the credit union-bank wars. Some members of Utah's congressional delegation have said they do not intend to act on the initiative.
Nevertheless credit unions have fought hard to defeat it. The Utah League of Credit Unions has spent $50,000 on a television and radio advertising campaign and spearheaded a grassroots campaign in which thousands of credit union members wrote or e-mailed their representatives urging "no" votes. The House passed the measure 41-34.