Vermont House Commerce Committee Hears Bankers' Testimony on Credit Union Parity Bill

MONTPELIER, Vt. – Vermont state-chartered credit unions have waited four years through patches in the state’s credit union statute for it to be totally recodified, but if the Vermont Bankers Association has its way, any recodification will include an amendment requiring credit unions with more than $10 million in assets to pay a state franchise tax. Vermont Credit Union League President/CEO Joe Bergeron sat through two days of testimony from the Vermont Bankers Association before the state House Commerce Committee on March 9 and 10 and listened as representatives from the VBA explain why Vermont’s 31 SCCUs should have to pay a franchise tax on their deposits. According to Bergeron, VBA President Christopher D’Elia stated the group’s concerns focused on three areas: field-of-membership (CUs have grown beyond their original mandate of common bond); credit unions’ involvement with business lending; and credit union taxation. Bergeron said he found it “curiously interesting” that D’Elia told the Committee members that all of the bankers’ other concerns would “go away” if credit unions were taxed. “I think it’s ironic that just having credit unions in Vermont pay taxes would simply make the bankers’ other concerns go away,” said Bergeron, adding that the bankers indicated they planned to introduce their amendment the afternoon of March 9th.. If that happens, Bergeron said Vermont credit unions will fight the bankers initiative “in any way we can.” He estimates that applying the state’s franchise tax to CU would only bring in about $600,000 annually. The League president said there are several members of the House Commerce Committee and the state legislature who are credit union friendly, but he refrained from commenting on whether the League had targeted any specifically to lobby if the bankers’ amendment gains support among legislators. The League is also aware that there are a few members of the state legislature who also work at banks, including House Commerce Committee Chairman Mark Young (R) who is chairman of one of Vermont’s smallest banks, First National Bank of Orwell. “Chairman Young has been fair with us to date in terms of removing his banker hat and wearing his chairman’s hat when he’s in committee,” says Bergeron. “I’m sure some of his peers have certain expectations of him because of his position as a banker, but hopefully he’ll continue to remain fair.” When Bergeron testified in front of the Committee a couple of weeks ago, joined by representatives from about a dozen credit unions who also testified , he expressed his certainty that “Vermonters and Vermont legislators want to see Vermont institutions remain Vermont charters. For that to happen, Vermont law must not put Vermont state-chartered credit unions at a disadvantage compared to their federal counterparts.” Others who testified at the March 9th and 10th hearing were: Denise Deschens, attorney, Primmer & Piper; Steve Knudson, attorney for banking; Tom Candon, deputy commissioner of banking; Tom Pelletier, Northfield Savings Bank; George Hayes, Brattleboro Savings & Trust; and Rick Manahan, People’s Trust. -