WASHINGTON – Though still in the very early stages, the American Association of Credit Union Leagues has decided to start a fund to help defend credit unions in their fight against the IRS' Unrelated Business Income Tax. UBIT was a major topic of discussion at AACUL's recent summer meeting, and AACUL Executive Director Susan Newton said leagues feel they have to step up to the plate and help ongoing industry efforts. There's no definitive goal set, but a million dollars is the tentative number AACUL has come up with. Since not all leagues were in attendance at the AACUL meeting, Newton said it would be premature to nail down an exact target number, but the fund itself will happen. "While it (UBIT) is now just in three states, it obviously has the potential for spreading," said Newton. "We want to make sure we have some money collected to fund some of the tactics," said Newton. Some of the tactics being considered are administrative, legal, and legislative. Credit union leaders close to this issue say the legal fees could grow considerably in coming years. Lobbying fees could as well if tax specialist lobbyists are brought in. With league dues always a controversial issue these days, league fundraising issues are sensitive. Newton said however that most leagues are considering making contributions from either their defense funds or reserves. CUNA Mutual, CUNA, and NASCUS have been working on UBIT for a few years now. Newton said these groups along with AACUL would have discretion over the funds. It's rare that AACUL does this type of fundraising effort. The last effort Newton could recall was for Credit Union House, but as far as for a legal/regulatory issue like UBIT, she couldn't recall any. "There was complete consensus that this was an issue we needed to deal with now. We left it up to the individual leagues to determine the amount. Some will take it out of their own budgets," said Scott Earl, president of the Utah Credit Union League and chairman of AACUL. Earl said he will first talk to his board to determine where the Utah League will get the money to donate. He anticipated that most league leaders would first consult their boards and/or membership. Earl said league leaders are concerned about the IRS' interpretations so far as to what constitutes UBIT. He said it's not clear what approach credit unions will take to fight UBIT, but whatever it is will cost money. For its part, CUNA has been very quiet about which strategy it will employ to fight UBIT. CUNA spokesperson Pat Keefe said there's a reason for that. He said the bankers may take advantage of the UBIT fight and that it could spill over into bigger picture tax issues. Keefe said revealing any strategy now would only help the bankers. He also said that just by talking about this new UBIT fund, AACUL is sticking its neck out as opposing groups could start their own war chests for UBIT. "The leagues have stepped up. Initially it affects only state-chartered credit unions, but this issue has the opportunity to wash over into some other areas," said Keefe. [email protected]