CHARLOTTE, N.C. (5/28/13)--Bob Bruns, president/CEO of Charlotte (N.C.) Metro CU, discussed the necessity of maintaining credit unions' federal tax exemption and the benefits of raising their member business lending (MBL) cap to better meet local business needs, in a May 21 article in the Charlotte Business Journal.
In the question-and-answer article, Bruns said that maintaining credit unions' federal tax exemption is a more pressing issue at the moment.
"Right now, I'm more concerned about tax-exemption," Bruns told the Journal. "Credit unions are tax-exempt. And they're talking about changing the tax code."
He added: "We're doing a little prevent defense where we're making sure they understand what a credit union is and that we return the benefit to consumers 10-fold. Our motivation is different than the banks. Look at the mess they got in, and credit unions did relatively well. We're hopeful they'll see the light and leave us tax-exempt. I'm afraid if we were taxed, credit unions would be absorbed and you'd be left with just one choice, and that's no choice at all."
CUNA has joined with affiliated state credit union leagues to launch a large-scale, nationwide grassroots-mobilization campaign urging credit union members across the country to deliver a united message to the U.S. Congress: "Don't tax my credit union!" The campaign is being launched at a time when the U.S. House and Senate have made broad-based tax reform a major priority. The initiative will urge lawmakers as part of any final tax reform plan to preserve the federal tax exemption credit unions receive as not-for-profit, member-owned cooperatives.
Bruns was asked if he thought it was necessary to raise credit unions' MBL cap.
"I don't think we should have a cap at all," Bruns told the Journal. "The Treasury did a study and 67% of business in America is small business. If you want to get the economy cooking again, we need to stimulate small-business lending. The big banks consider it too small to be worth it. The community banks are still hurting pretty bad from the downturn and are reluctant to lend. Credit unions stand ready to fill that void. We've just got to convince Congress."
U.S. Sen. Mark Udall's (D-Colo.) Small Business Lending Enhancement Act (S. 968), introduced in the Senate May 16, would increase the credit union member business lending cap to 27.5% of assets, from the current 12.25% (News Now May 17). Doing so would generate $13 billion in new loans and create 140,000 jobs, the Credit Union National Association said.
To read the article, use the link.