WASHINGTON-At the annual meeting of the National Council of State Legislatures, the bankers attempted to pave the way for credit union taxation by couching it as a preemption issue. In the end, the Financial Services Standing Committee of NCSL voted 15-4 to dismiss a policy amendment pursued by the bankers to ask Congress “to oppose the prohibition in the Federal Credit Union Act that exempts federal credit unions from state and local taxes,” according to CUNA Vice President of State Government Affairs Colleen Kelly. CUNA and the leagues had worked with committee members during the meeting in San Francisco to garner support of maintaining federal credit unions’ tax-exempt status. Additionally, CUNA pushed through a policy supporting state chartered credit unions’ option to carry private insurance without opposition. CUNA had actually caught wind of the bankers’ amendment several weeks in advance and went to work from that time. Many representatives from credit unions and the leagues attended the committee meeting wearing their `I Love Credit Unions’ pins. CUNA President and CEO Dan Mica commented, “NCSL’s committee clearly saw the wisdom in rejecting this banker-inspired amendment. This effort by the bankers showed clearly that they are striving to erase the credit union tax exemption from not only state credit unions – their latest tactic-but federal credit unions as well. Credit unions need a united front to turn back the bankers, and CUNA and the leagues – once again acting in partnership-have shown they have the power to fully support credit union interests.” The states that voted with credit unions included Connecticut, Florida, Illinois, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Mexico, Ohio, Pennsylvania, and Virginia. Delegates from Colorado, Delaware, South Dakota, and Utah supported the bankers’ measure. Representative David Clark of Utah, who works for Zions Bancorporation, introduced the policy amendment. Each state received one vote, regardless of the number of lawmakers in the delegation. Though the vote portrayed a solid victory, Kelly did note that a lot of legislators spoke out against credit unions. “We do expect that this was just one war and that the battle continues,” Kelly commented. “A year from now, NCSL will meet in Utah and Marty Stevens, who is the speaker of the (Utah) House and works for Zions Bancorporation, who was involved with a lot of the anti-credit union legislation that occurred in Utah last year, is now the president of NCSL,” she said. “So we do see that a year from now we probably will have additional challenges.” Adding to credit unions’ strife, CUNA Vice President of Legislative Affairs and Senior Legislative Counsel Gary Kohn pointed out that the ABA’s new vice chair nominee is none other than Zions Bancorporation Chairman, President, and CEO Harris Simmons of Salt Lake City, Utah. If the policy had survived, it could have spelled trouble for credit unions, even though it does not carry the weight of law, Kelly explained. “It would have given [the bankers] a lot more ammunition.because they can just simply walk in and show that NCSL has already taken a position.NCSL is a powerful organization, not only state-by-state, but also in Washington as really being a voice for the state organizations,” she said. “With so much about federalism and preemption, particularly in the current administration, they do listen to them and they do have a seat at the table on a lot of these issues.” Credit unions won the day, Kelly said, but there will be more work to come. “It was definitely a victory; it was a big victory. It’s just that it’s not over. I feel we’ve already started preparing for the next one. The bankers were very organized and they’ve said `it’s good sound policy and we’re bringing it back.’ ” The vote followed a debate (at the insistence of the bankers, according to Kelly) the previous day between CUNA Chief Economist Bill Hampel and ABA Senior Economist Keith Leggett. Instead of the usual arguments, ABA tried to present federal credit unions’ tax exemption as a preemption issue, rather than a bank versus credit union issue; a perception that credit union supporters worked to clear up. National Association of State CU Supervisors Vice President of State Regulatory Affairs Mary Martha Fortney also participated in the conference. (See her comments in the July 30, 2003 issue of Credit Union Times.) -