WASHINGTON (9/1/10)--Directly on the heels of an advisory panel’s report on possible tax law revisions, the Credit Union National Association (CUNA) sent a letter to each member of the President’s Economic and Recovery Board (PERAB) to underscore the public-policy value of the federal credit union tax status. The PERAB is an outside advisory panel and is not part of the Obama administration, and its report does not represent recommendations, but rather options to be considered for tax reform. However, CUNA President/CEO Bill Cheney immediately and adamantly defended the credit union tax exemption, explaining that the strong public-policy reasons that first inspired that tax status remain valid today. “It may be the case that not all tax preferences have lived up to expectations, but the credit union tax exemption is one of the highest-yielding investments the federal government has made,” Cheney wrote. CUNA figures show that America’s 92 million credit union members receive substantial benefits in the form of better pricing on services, saving them about $7.5 billion a year. The $7.5 billion savings to consumers is especially significant when measured against the $1.5 billion in lost federal revenue a year that the government says is represented by the credit union tax exemption. “Further, the tax exemption helps to ensure consumers have choices beyond commercial banks in the financial marketplace. It is appropriate to view these results not as an economic distortion,” Cheney said referring to the report’s own language, “but as evidence of sound public policy.” The 118-page PERAB report, released Monday, spent a scant few paragraphs discussing the credit union tax exemption in its Section IV. “Nevertheless,” Cheney declared in his letter to policymakers, “on behalf of credit union members and credit unions, I am compelled to set the record straight on the importance of the public policy justification for the continuation of credit unions’ federal tax exemption. “CUNA will continue our strongest efforts to ensure that policymakers understand the purpose and effects of the credit union tax exemption,” Cheney concluded, offering to meet and discuss points raised in his letter. The letter was sent also to representatives of the U.S. Treasury Department and White House, as well as to congressional leaders and National Credit Union Administration Chairman Debbie Matz.