Iowa Tax Bill Dies in State Senate, Majority Leader Won't Address Measure

DES MOINES, Iowa – The Iowa Credit Union League is crediting what it described as the “unprecedented grassroots effort” demonstrated by credit union staff, members and CU supporters throughout the state with helping to kill a bill in the state Senate that would have taxed community chartered credit unions with more than $150 million in assets and offer member business loans. Iowa League Public Affairs Director Murray Williams said Senate Majority Leader Stewart Iverson Jr.(R) communicated with the League that he did not plan to address SF 242 which was passed by the Senate Commerce Committee on March 11, and was sitting in Iverson’s office waiting to be passed on to the Senate Ways and Means Committee. In Iverson’s letter to the League, he stated that, “Both sides are able to make compelling cases to legislators. Bankers feel quite strongly that the current tax disparity makes banks uncompetitive, especially in those communities with large credit unions. Legislators are concerned about any playing field that may be tipped in favor of one industry at the expense of another. “Credit unions on the other hand, point out that Iowa is one of only a handful of states that already requires credit unions to pay some form of a tax, and Iowa would be the first state in the nation to apply this new tax. Legislators have worked hard to lower taxes on Iowans, not raise them, so this credit union argument also has a great deal of merit,” Iverson wrote. The Senate Majority Leader had asked credit unions and banks to do a potential vote count to determine if the banks had a majority of votes to pass the measure. Referring to that vote count, Iverson wrote, “After both sides conducted their counts, it became clear to myself, as well as most others, that the banks lacked the votes to pass this legislation.My fear was if the legislation was defeated on the floor, this issue would have been dealt a very serious set-back, and the legislature would not likely be able to resolve this disagreement for a long, long time. That would not be a satisfactory result for me on this issue, nor do I think you would have wanted such an outcome,” Iverson wrote. A bill identical to the Senate bill was sitting in the House, but Williams said since the House wanted the Senate to take the lead and would not move on its bill until the Senate moved on theirs, “the tax bill is dead for all intensive purposes.” According to Williams, what turned the tide for credit unions was the huge grassroots support credit union advocates demonstrated to state legislators against the measure, including sending over 11,000 letters in support of credit unions, more than 5,000 emails to state legislators, and the signing of petitions. “The banks still have unlimited options available that they may try to use in the future, but for now Iverson’s letter shows us that state legislators have no stomach for a credit union tax,” said Williams. [email protected]