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Washington
Key lawmaker supports CU tax status MBL cap lift
WASHINGTON (6/12/09)--Maintaining the existing tax-exempt status of credit unions and lifting the 12.25%-of-assets cap imposed on credit union member business lending (MBL) are hot topics for credit unions, and Rep. Ron Kind (D-Wis.) told attendees at the American Association of Credit Union Leagues' 2009 GAPS Conference that credit unions have his full backing regarding both of these issues. Addressing political and governmental affairs specialists from state credit union leagues, Kind said that he is a “strong critic” of taxing credit unions, adding that he would oppose any measure that could potentially tax credit unions to offset federal spending under pay-go budgetary rules. Taxing credit unions could also be one of a multitude of potential reforms studied by President Barack Obama’s tax reform panel, but Kind said that he would look out for the interests of credit unions when this panel reports its findings in late 2009. Credit union representatives nationwide should be prepared to contact their legislators and make their voices heard if the taxation of credit unions is proposed, Kind said. However, Rep. Paul Ryan (R-Wis.), speaking during a later session, said that he does not expect credit union taxation to be on the table this legislative session. Both Kind and Ryan are members of the powerful tax policy-writing House Ways and Means Committee. Commending credit unions for “stepping in to the void” and continuing to lend to small businesses when many other financial institutions have tightened their lending practices, Kind said that he favors lifting the MBL cap. There is also a “growing sentiment” among members of Congress that the MBL cap should be lifted, he added. Ryan took a more general tone, speaking in support of regulatory relief and credit relief, both of which would be a preferred means of stimulating the economy. Both lawmakers said that credit unions should be recognized for making the right decisions and avoiding the risky investments that have lead to the economic downturn, and encouraged credit unions to continue telling “their story” to both legislators and citizens.
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