Staking out an ambitious position, the American Bankers Association is planning to ask Congress to tax credit unions with more than $25 million in assets.

To keep federal and state tax exemptions, credit unions with assets below that level could not make business loans or take commercial deposits, according to a legislative proposal circulating among banking trade groups.

Finally, occupation-based credit unions could keep their tax breaks only if members share a single common bond. Those already serving multiple employer groups would be grandfathered as long as they remained under the$25 million-asset threshold.

The ABA's government relations council, composed of 130 bankers from around the country, adopted the proposal in September. The ABA board has not yet given its final approval.

ABA will confer with its other allies in the credit union fight, the Independent Bankers Association of America and America's Community Bankers, to finalize its legislative position before Congress returns in January, said Edward L. Yingling, the ABA's chief lobbyist.

The proposals could strike a chord with lawmakers who are looking for a compromise solution, he said. "What the members of Congress say is: 'I want to protect small credit unions, but I do think there is a limit to what credit unions ought to be able to do,' " he said.

Lax enforcement of membership limits has widened the number of people who get subsidized financial service from credit unions, bankers argue. Because credit unions don't pay taxes, they generally beat bank loan and deposit rates.

With a $25 million-asset threshold, 2,335 of the 11,328 credit unions would lose their tax breaks, according to the National Credit Union Administration. By comparison, according to the Federal Deposit Insurance Corp., 9,703 of the 11,452 banks and thrifts have more than $25 million in assets.

Besides paying taxes, the ABA plan would require larger credit unions to comply with the Community Reinvestment Act and submit to "bank-like" regulation administered by the National Credit Union Administration such as bank capital requirements.

All community credit unions would be subject to CRA under the plan.

The proposal would exempt credit unions that solely serve low-income neighborhoods from paying taxes or complying with stiffer regulations.

Credit union trade groups blasted ABA's plan, with the National Association of Federal Credit Unions labeling it "diabolical."

"It is absurd," said Scott Sutherland, a spokesman for the Credit Union National Association. "They want to saddle a very small institution with the same kind of regulatory burden as an institution like NationsBank."

He said only "a small number" of members of Congress are asking for limits such as the ABA is proposing.

Two bills are currently pending in the House. One, by Rep. Steven LaTourette, R-Ohio, would allow credit unions to serve multiple membership groups.

The other, by Rep. Martin Frost, D-Texas, would let a credit union stretch beyond its original membership group to serve low-income areas.

Separately, the IBAA asked the Clinton administration to tally how much the exemption would cost taxpayers if banks lose a Supreme Court case limiting credit union membership.

The exemption's $1 billion cost will increase if the court decides to let credit unions continue expanding membership beyond single common bonds, IBAA wrote the Treasury Department and the Office of Management and Budget.

"The banking world deserves to know the administration's position," IBAA executive vice president Kenneth A. Guenther said.

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