BOSTON – President Bush's Chief of Staff Andrew Card Jr. defended credit unions' tax-exemption status in a recent interview with the Massachusetts Bankers Association's Massachusetts Banker Magazine, stating that he is not in favor of "taking away an instrument called the credit union or the instrument called a savings bank or a Co-operative bank. I think lots of different products that allow people to make a choice to save are good." When questioned about the Bush administration's position not to tax "large, tax-free credit unions at a time when the president is such a strong supporter of relieving the tax burden on individual citizens," Card stated he is "not going to slip into the trap of interfering in the normal competition that comes between the banking institutions or the credit union institutions. Let the competition begin. Now, some may say the competition is not necessarily on a level playing field, but the playing field has been well-known for a very long time." Card also emphasized that the money members put into credit unions is not tax free. "The people who put their money into the credit unions are paying taxes. The people who borrow money from the credit unions to build a home are paying taxes. I don't think that it is, quote, tax-free money," adding that "if it were, there would be a lot more people using credit unions." The Chief of Staff also made it clear that while President Bush "is a very powerful man, he is not a dictator. I suspect that even if the president were to say, "I'm not sure credit unions should exist the way they do today," it would be a difficult challenge to have Congress change the laws." "The financial community has changed so much. It will probably keep changing as more and more products are discovered and ways to generate growth for shareholders and growth for depositors. I think it would be wrong for us to try and micro-manage it and pick winners and losers," Card stated. The interview also covered other topics such as the national budget deficit, Federal Reserve Chairman Alan Greenspan, the likelihood of a resurgence of the Republican Party in Massachusetts, and Card's perspective on his three-plus years in the White House as Bush's chief of staff. The article the interview was covered in ran in the third quarter 2004 edition of Massachusetts Banker Magazine. -

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