Banks' campaign to abolish credit unions' tax exemption has not won many converts in Congress or the Bush administration, but it did get an unlikely boost last week from a nonprofit think tank.
The Washington-based Tax Foundation released a study Feb. 28 that said the exemption would cost the government $31.3 billion over the next decade.
The study also claimed that credit unions are using the exemption to fund growth and expansion, not services for people of low or moderate means.
Bank groups wasted no time trumpeting those conclusions. "More and more studies are piling up proving that rapidly expanding mega-credit unions have no business being tax exempt," said Camden R. Fine, the president and chief executive officer of the Independent Community Bankers of America, in a press release issued the day the study was made public.
Dan Mica, the president and CEO of the Credit Union National Association, said in a March 1 news release that the study is rife with inaccuracies. Among them, he said, is that it overstates the income the government would generate.
The errors "pose serious questions as to the credibility of the whole study," Mr. Mica said.
