Mica Asks House Members to Show Support for CUs' Tax-Exempt Status Amidst Increasing Banker Rhetoric

WASHINGTON-In a letter to every member of the House of Representatives, CUNA President and CEO Dan Mica has asked lawmakers to “reassure” credit unions of their commitment to credit unions’ tax exemption. Following the most recent rash of banker tactics and rhetoric attacking credit unions’ tax-exempt status, Mica wrote a letter to the 435 members of the House asking the lawmakers to 1) write a letter in support of credit unions’ tax exemption; 2) issue a public statement or insert remarks in the Congressional Record supporting credit unions’ tax-exempt status; and/or 3) use every opportunity to urge the bankers to focus on positive legislation for themselves. CUNA’s letter was sent to the Hill following the American Bankers Association’s “Spring Summit,” where the leadership of the state bankers associations, the ABA Government Relations Council, the industry’s grassroots network – TEAM 21 – and ABA’s board was expected to visit congressional offices. Mica warned that some in the credit union community were beginning to sense a serious assault coming from the banks. “As a former Member of Congress, I fully understand the negative atmosphere that can be created by a major political clash during an election year, and I have so advised the Board of Directors of CUNA,” Mica wrote. “All of us are hopeful just such a confrontation can be avoided.” He continued, “However, the banking industry has chosen to create just this atmosphere. This is not a fight we have chosen; yet we are determined to defend ourselves. In fact, my board has directed me to match any efforts the bankers may put forward – with maximum constituency involvement.” Mica explained in the letter that to tax credit unions is to tax 85 million Americans and a tax on credit unions would allow banks to grow more “anti-consumer.” “For example,” he wrote, “credit unions on average offer lower interest rates than do banks on credit cards, and new and used auto loans. Imagine how expensive other lenders would make credit cards, or auto loans, if they did not have to face lower credit union rates in juxtaposition to their own.” Mica pointed to recent banker activities like “Operation Credit Union,” which is designed to inform lawmakers of the competitive threat credit unions are to banks. The letter also noted that credit unions account for less than 2% of total household financial assets. Banking trades have also sent out a series of electronic requests for bank officials to “urge the Ways & Means Committee to hold a hearing on the tax-exempt status of credit unions that compete unfairly with community banks.” [email protected]