WASHINGTON Community bankers are blasting both major presidential candidates for supporting the tax-exempt status of credit unions and imploring them to reconsider their positions.
In letters to Texas Gov. George W. Bush and Vice President Al Gore, Americas Community Bankers president Diane M. Casey said the trade group is deeply disappointed that you have taken this premature public policy position without any input from taxpaying community banks.
I urge you to revisit your position and learn more about this issue before accepting credit union dogma, she added.
Both candidates recently declared their support of maintaining credit unions tax-exempt status.
I do not believe that credit unions, which are owned by their depositors and provide services to their depositors, should be subject to taxation, Gov. Bush said in a statement this month. The vice president made a similar declaration in an August letter to Dan Mica, the president and CEO of the Credit Union National Association. I want to assure you that as President I will continue to support the tax-exempt status of credit unions, Mr. Gore wrote.
Bankers argue that credit unions should be subject to the same tax requirements as banks because they operate across broad geographic and democratic areas, sell a wide range of financial products, and serve customers who are more affluent than the average citizen.
The tax exemption costs the government $1 billion a year, according to the banking trade group. The tax subsidy of credit unions is unfair to other depository institutions, and even more importantly, it is unfair to all taxpayers who must pay for this subsidy, Ms. Casey said in her letter to the candidates.
The credit union group responded with praise for the Democratic and Republican candidates. Fortunately both Al Gore and George W. Bush understand
the benefit to American consumers that comes from having a not-for-profit, cooperative alternative in the financial marketplace, Mr. Mica said in a statement.