In a statement for the record, the American Bankers Association (ABA) wrote the House Ways and Means’ Oversight Subcommittee yesterday strongly encouraged the subcommittee to include the credit unions’ tax exemption in its ongoing review of tax-exempt organizations.
ABA noted that many credit unions – including 183 with more than $1 billion in assets each – bear no resemblance to the traditional credit unions Congress originally envisioned to be worthy of preferred tax status.
ABA pointed out that Congress reaffirmed in 1998 that the credit union tax exemption is associated with the mission of meeting the financial needs of people of modest means. However, credit unions “steadfastly refuse to define ‘modest means,’ thus evading the simple determination of whether they are fulfilling their mission.” ABA emphasized that credit unions should be required to demonstrate service to people of modest means to assure taxpayers that the tax subsidy is being properly employed.
ABA added that federal credit unions should be required to file Internal Revenue Service Form 990 -- like state-chartered credit unions and most other tax-exempt institutions -- to disclose executive salaries and promote improved corporate governance and greater accountability. Form 990 “would inform Congress, taxpayers, and credit union members about whether this valuable tax subsidy is going towards the credit union mission or is subsidizing credit union management,” ABA said.
ABA pointed out that the credit union tax exemption can no longer be justified for credit unions that have strayed from their mission of serving people of modest means.
“The credit union tax expenditure no longer supports the public policy of providing financial services to low- and moderate-income consumers,” ABA said. “Abolishing [it] would help reduce the U.S. debt and eliminate distortions in the financial services industry.”
Read the statement.
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How does the ABA know for a fact that credit unions bear no resemblance to the traditional credit unions Congress originally envisioned. Was anyone at the ABA alive when the FCU Act was signed in 1934? Also, if ABA was so insistent on defining "modest means," why didn't Congress define it in 1998? Maybe because they had the foresight, unlike the ABA, to realize that modest means is a moving target and will change from generation to generation. Maybe when banks justify their almost tax-free status, with their suspicious-looking LLCs, open their books and show the world exactly how much in taxes they pay in relation to their gross income, then maybe we can have a rational discussion.
ReplyDeleteIf banks pushed to get the unbanked into their lobbies and provided affordable, financial services that these consumers wanted then credit unions would be in trouble. Seems like the ABA and the good Doctor are 'itching and moaning about people their membership does not want to serve and complain about credit unions who do.
ReplyDeleteBTW has the credit union industry said one word about the $2 billion JP Morgan Chase lost in transactions that represented less than one percent of the company's assets? Is that an activity that credit unions are allowed to do since credit unions "are acting just like banks?"
2nd BTW, modest means under this current Administration is any person/family with less than $250,000 a year in income.
2 perfect examples of the delusional mind set of some credit unions. Modest means is 250,000? That' would be funny if it wasn't so naive.
ReplyDeleteWhy didn't congress describe modest means.? To give you time to hang yourself, that's why. The mission is frayed by your own actions and you don't even get it.
The selective and self serving retorts are a mask for, " I don't think I can cut it, if I'm taxed". I hope they do tax us so it'll be easier for more to decide to convert, AND THEN WE CAN ESCAPE THIS JAILER AKA NCUA.
Bring me taxation if that's all I have to paybtomget access to capital and more biz lending...and away from being regulated as if I'm still a 20 mill cu.
David- if a tree falls in the woods, does it make a sound?
ReplyDeleteDer.