WASHINGTON (7/17/13)--The banks will not take a holiday from their attacks on the credit union tax status as the July 26 deadline for all suggestions for tax reform legislation nears, and their fervor, says John Magill, who heads up the Credit Union National Association's government affairs department, must be more than met by credit union advocates who understand the public policy value of the tax exemption.
CUNA sent a letter to all senators Tuesday to keep up the steady hum of voices that urge "Don't tax my credit union." CUNA and the state credit union leagues launched an advocacy campaign of that name in May and it has sparked more than 340,000 Capitol Hill contacts by credit union supporters to date.
"Credit unions and their members must keep up this momentum on the tax issue because the banks will turn themselves inside out trying to get traction at this critical time," Magill said Tuesday. He noted that the American Bankers Association sent another screed to lawmakers just this week.
"Although the banks' anti-credit union rhetoric may be seen as time-worn, weary, and debunked by many, it is up to credit unions and their members to make sure every policymaker sees clearly that a tax on credit unions would be a tax on 96 million Americans who belong to credit unions."
Magill emphasized that the tax treatment of credit unions continues to serve the purpose for which it was created--promoting financial choices for consumers and small businesses. Credit unions return any benefits to members through higher returns on savings, lower rate on loans, and most importantly, low or no fees.
"These benefits, combined, can result in more than $8 billion in direct financial benefits each year to the 96 million Americans who belong to credit unions and others who derive benefits due to the competitive force credit unions provide in the financial market place," Magill reminded.
The CUNA letter sent Tuesday, which made all the points above, also underscored to lawmakers that while the benefits of the credit union tax status to American taxpayers is great, taxing credit unions would only account for 0.06% of this year's deficit.
In other words, CUNA wrote, it would take 1,600 other such sources of a similar size to eliminate the deficit: It would fund the federal government for barely more than one hour.