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CU System
Donovan: 'Table Is Set' For Tax Reform
UNCASVILLE, Conn. (10/11/13)--Credit unions' membership numbers give them a tremendous advantage over their political opponents, aka the banks, said Credit Union National Association Senior Vice President Ryan Donovan Thursday, but only if federal lawmakers believe credit unions can bring their members to speak up on their behalf.

"Lawmakers take notice when they hear credit union
Click to view larger image Credit Union National Association's Ryan Donovan says now is the time for credit unions to ask their members to contact federal lawmakers in support of the credit union tax status. (CUNA Photo)
 numbers--but they take ACTION when they hear from them," he said.  Donovan was addressing the CUNA Community Credit Union & Growth Conference here.  The conference ends today.

Donovan told the assemblage of community credit union leaders that there are advocacy lessons for credit unions woven through the success of Prohibition Era politics.

First, as Donovan has advised credit unions many times, political advocacy is a "long game."  Like prohibition workers, advocates have to be disciplined, have to work methodically to generate "support on the ground," and have to be in it for the long haul--though hopefully, Donovan added, not the 60 years it took Prohibition to be established.

Another thing to remember, Donovan said, is that a group asking for change--like the banks  asking to revoke the credit union tax status or the prohibitionists seeking to revoke alcohol--is always more passionate and more motivated than the one defending the status quo.

"Credit unions are the status quo" in the credit union tax status fight, he said. "If we don't react when there is a threat, they may demonstrate the resolve to wear us down.  And that would be bad for credit union members."

The CUNA senior vice president, noting the meltdown in Congress that has caused the ongoing government shut down, said he could anticipate that credit unions might wonder, given lawmakers' seeming inability to get anything done, why bother fighting so hard on tax reform?

He informed the audience that Congress' current 95% disapproval rating is "unsustainable."

"When we are out of this crisis, there will be immense pressure on lawmakers to show that they can get something done," and tax reform could be that something, he said. The tax reform process has been a bi-partisan effort, he reminded, and added that "table is being set for Congress to do something."

"The problems that led us to the fiscal cliff and to this debt ceiling problem have not gone away. We have a debt in excess of $14 trillion and the government has been running annual budget deficits since 2001," Donovan said.  It is quite possible that the resolution for the debt ceiling will include instructions for the tax-writing committees to produce comprehensive reform and perhaps expedited consideration, he added.

Donovan said the tax reform process could still take some time, but how the credit union tax status is accommodated in the early drafts of legislation will be critically important.

Regarding bank attacks, Donovan reminded that the banks have pushed tax legislation in Oregon and Illinois and run campaigns of anti-credit union radio ads in Missouri, Illinois, and Washington, D.C., among other things.

In an on-the-spot poll, Donovan canvassed his audience asking how many thought the tax threat to credit unions was real.  Ninety-one percent indicated they understood it is real.

He urged the credit union representatives to engage their members in the advocacy efforts and noted the advocacy tools CUNA provides through its "Don't tax My Credit Union" campaign at donttaxmycreditunion.org, including mobile advocacy apps that allow instant access to lawmakers and regular updates on the tax issue.


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