CUNA and NAFCU Work Together in Opposition to Bankers' 990 Assertion

WASHINGTON-CUNA and NAFCU joined forces on a July 8 letter to House Ways and Means Committee Chairman Bill Thomas (R-Calif.) pointing out the inaccuracies of a letter June 29 by the bankers stating that credit unions should have to file Form 990 with the Internal Revenue Service. The letter signed by CUNA President and CEO Dan Mica and NAFCU President and CEO Fred Becker advocated that the bankers are only trying to weigh credit unions down with burdensome, unnecessary paperwork. Form 990 is the Return of Organization Exempt from Taxation. The American Bankers Association and America’s Community Bankers are the groups that suggested credit union should have to file these forms. “The bankers are seeking to impose a regulatory burden on credit unions, something that is contrary to House actions to lessen the regulatory burdens on all financial institutions as demonstrated in the overwhelming House vote last year in support of H.R. 1375,” the letter, which went to Thomas and the committee’s Ranking Member Charles Rangel (D-N.Y.), stated. “We hope that members of the House Ways and Means Committee will immediately dismiss the bankers’ suggestion for an unnecessary paperwork burden on thousands of credit unions.” The letter also pointed out that credit unions do not lack financial disclosures, as the bankers argued, and must file an 18-page 5300 Call Report quarterly with NCUA. The letter from CUNA and NAFCU also stated, “The Secretary of the Treasury `may relieve any organization required…to file an information return from filing such a return where he determines that such filing is not necessary to the efficient administration of the internal revenue laws.’ ” Treasury Secretary John Snow has come out in support of credit unions’ tax-exempt status but has not commented on this issue. However, the IRS has written NCUA that the group 990 that was formerly filed by the agency has not been necessary since 1969. Additionally, “ Contrary to the bankers’ allegation,” Mica and Becker’s letter read, “federal credit unions have never sought to “be given the same rights and privileges that are afforded to the federal government” by not filing the Form 990. In fact, the instructions to the form recognize fifteen categories of organizations not required to file the Form 990; federal credit unions are in the seventh category as instrumentalities of the United States exempt from federal income tax, while governmental units are covered by the thirteenth category.” [email protected]