The banking industry's top trade group is renewing its push to end a tax break for credit unions. The American Bankers Association last week unveiled print and radio ads that call on Congress to repeal a Depression-era law that exempts credit unions from federal income tax because of their cooperative structure. The exemption amounts to "indefensible and outdated special treatment," according to one of the spots, which coincided with a conference in Washington convened by the Credit Union National Association, a trade group.
As part of their meeting, members of CUNA were expected to visit Capitol Hill to urge legislators to lift limits on business lending by credit unions. Currently, a credit union's loans to businesses cannot exceed 12.25% of its assets, but CUNA backs a bill reintroduced recently by Rep. Ed Royce, R-Calif., and Carolyn McCarthy, D-N.Y., that would raise the lending cap to 27.5%. Similar measures have been introduced in recent years in both the House and Senate but have yet to advance despite attracting bipartisan support.