DES MOINES, Iowa – In a series of moves suspected by many in the credit union industry, as being orchestrated by the American Bankers Association, state bankers associations throughout the country kicked their efforts up a notch throughout the year to get state-chartered credit unions' tax exemption repealed. Excluding Utah where the fighting between CUs and the Utah Bankers Association got particularly nasty, credit unions in five other states also saw taxation legislation introduced. In Iowa, an identical bill was introduced in the Commerce Committee (Senate File 242) and the House Ways and Means Committee (House File 388) that would tax a credit union if it had more than $150 million in assets, was community chartered, and provided member business loans. The tax would amount to a 5% on an increase in a credit union's equity for a taxable year. The measure died in the Senate when Iowa Senate Majority Leader Stewart Iverson Jr. announced he wouldn't bring the legislation to the floor for a vote. Also in February, CUs in New Mexico faced a tax bill, but it was eventually tabled in the House Tax & Revenue Committee by State Rep. Raymond Ruiz (D-Albuquerque) who said the bill was "poorly worded." In Oregon, a tax hike bill drafted by the Oregon Bankers Association was introduced in March to tax SCCUs with more than $100 million in assets and use the raised funds for the state's School Improvement Fund. Three of the five legislators who originally supported the bill pulled their support and the measure was eventually defeated. One month later, in April, the California Credit Union League called on credit union leaders and members to help stop a bill introduced by Assemblywoman Cindy Montanez with language from the California Bankers Association, that would impose a tax hike on all state and federal CUs in California. She eventually withdrew the bill because of lack of support. Meanwhile, on the east coast, state banking associations tried a different tactic to convince legislators CUs should be taxed. In the Sunshine State, a Florida TaxWatch study partly funded by the Florida Bankers Association, questioned the validity of CUs' tax exemption. That study was refuted by a report from the Consumer Federation of America which called the TaxWatch study "one-sided" and "presenting a distorted view of credit unions." The Virginia Credit Union League put CUs on notice to be prepared to fight the Virginia Bankers Association's "aggressive" lobbying for the credit unions' tax exemption. CUNA State Governmental Affairs Director Colleen Kelly said even though 2003 wasn't the first year state banking groups had attacked credit unions at the state level, this year marked a change in the bankers' tactics. "Even before this year there were attacks from the bankers, but they hadn't introduced their own bills. Instead they just went after credit unions' respective state law," said Kelly. "Credit union leagues are on high alert for continued banker attacks," she said. -

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