WASHINGTON (1/29/14)--Job creation and tax reform were topics of President Obama's State of the Union address last night, and the Credit Union National Association is urging the president to consider the credit union perspective in these and all important financial policy discussions.
Of key interest to credit unions, Obama made broad remarks about possible changes to the country's tax code.
CUNA President/CEO Bill Cheney assured credit unions that nothing in the SOTU remarks indicated that the credit union tax status is under any more scrutiny right now than any other tax expenditure.
"In fact," Cheney said, "through our conversations with the administration and on Capitol Hill, it is apparent that not all tax provisions are created equal, and the strong public policy reasons behind the credit union tax status remain as compelling today as they were when first adopted."
Cheney added, however, that tax policy discussions are still very much in play, and it is imperative that credit unions continue their strong advocacy efforts on behalf of their federal income tax exemption throughout those discussions, through CUNA's "Don't Tax My Credit Union" initiative and through in-person meetings with policymakers of all levels of government.
Related to the president's remarks on job creation, Cheney reminded that credit unions stand ready to create 140,000 new jobs through increased member business lending authority.
That is the estimated number of new jobs that would be added to the economy if credit unions were given the statutory authority to write more member business loans (MBLs).
CUNA and credit unions support the Credit Union Small Business Jobs Creation Act (H.R. 688), which would increase the MBL cap to 27.5% of assets, up from the current cap of 12.25%. In addition to increasing available jobs, CUNA has estimated that lifting the MBL cap would inject $13 billion in new funds into the economy, at no cost to taxpayers.
Obama also spoke in favor of patent reforms. CUNA backs legislation that would curb abusive patent litigation by removing some of the financial incentives sought by firms that assert low-quality patents. So-called "patent trolls" continue to use low-quality patents to try to extract settlements from credit unions and others. Credit unions have been sued for the use of certain ATM technologies, check imaging applications and check cashing applications, and providing members with mobile transactions through their smartphones.
Obama also took the occasion of his annual address, his fifth, to encourage the U.S. Congress to move forward on restructuring the country's housing finance system. CUNA urges the U.S. Congress as it considers comprehensive housing finance reform, to ensure that credit unions and other community financial institutions continue to have access to the secondary mortgage market.
Other themes of the president's speech included rebuilding American's trust in the political process, economic growth, eliminating pay inequality, creating a new savings instrument to help Americans save for retirement--to be called MyRA--and the Affordable Care Act.