The credit union bill approved in April by the House would cost the federal government $217 million in lost tax revenue over five years, according to a Congressional Budget Office study released Tuesday.
That amount is probably not enough to prevent approval of the bill, but industry officials disagreed whether it could add another hurdle for credit union forces who are anxious to have the Senate pass the measure this year. Congress, in most instances, is required to find ways to pay for a bill before passing it.
"It won't have any significance whatsoever," said Scott Sutherland, a Credit Union National Association spokesman.
However, Mike ter Maat, senior economist for the American Bankers Association, said, "It will make it more difficult to pass legislation that shouldn't be passed."
The Senate has the option of finding offsetting revenue increases or spending cuts elsewhere in the budget or finding 60 votes to waive the budget rule.
Tax revenues would drop from 1999 to 2003 because the legislation would ease limits on credit union membership, promoting expansion of the number and size of occupation-based credit unions with multiple common bonds, the study said.
Annual membership gains would double, to 6%, by 2000 from the projected growth rate of 3% under current law. Federal income tax revenue would fall as a result because deposits would be flowing from banks and thrifts to tax-exempt credit unions.
Uncle Sam would record $628 million of revenue and savings over five years from increased insurance fund assessments and cuts in premium rebates, the study said.
But congressional budget rules, known as "pay-as-you-go procedures," exclude savings related to deposit insurance funds from official calculations.