Tax exemptions

The pandemic is likely to dominate the discussion during CUNA’s online Governmental Affairs Conference, but perennial issues such as the industry’s tax exemption will also be spotlighted.

The bank trade group called for lawmakers to revoke the industry’s tax exemption and suggested that credit union acquisitions of banks create a “brain drain” of local lending expertise that could slow any economic recovery.

As lawmakers look for ways to plug budget gaps, credit union groups are preparing for a possible assault on the industry's tax exemption at the state and federal level.

The National Taxpayers Union called on Congress to reevaluate the movement's tax structure, including citing the trend of CUs buying banks as a "textbook example of poor tax policy."

A special committee in the state Senate has recommended not to move forward on a proposed bill to tax credit unions above a certain asset threshold.

A study commissioned by the Florida Bankers Association found that 70% of participants supported Congress requiring CUs with at least $500 million in assets to pay income taxes.

One bill would tax credit unions in the Sunflower State with at least $100 million in assets.

As credit unions buy up community banks, policymakers should take another look at ending the industry’s tax exemption and regulatory breaks.

A federal court this week will hear arguments in NCUA's appeal of a a judge's split decision on its 2016 field of membership rule while the new NCUA board meets later in the week.

The fight over the credit union industry's tax-exempt status has moved from the federal to state level. It will take the entire movement working together to combat these challenges.