2004 saw CUs Defending Nearly Every Aspect of their Operations, Expect Same Trend Next Year, NAFCU Warns

ATLANTA – Despite the ongoing attempts by the banking industry to rescind the industry’s tax exemption, NAFCU President/CEO Fred Becker offered reassurance that one of Congress’s most powerful figures is not jumping on the bandwagon. “(Bill Thomas) has not said credit unions should be taxed,” Becker told attendees at the African-American Credit Union Coalition’s recent annual meeting. “From a public policy perspective, he’s saying we should periodically examine competition” between credit unions and banks. Thomas is the chairman of the House Ways and Means Committee and has proposed examining how credit unions justify their tax-exemption status. Becker provided a regulatory and legislative update at the Coalition’s meeting. Many of the top industry issues, he said, such as bankruptcy reform and the Credit Union Regulatory Improvements Act (CURIA), kept this year’s legislative session eventful and credit unions can expect to see more of the same next year. Becker recalled a tax exemption tte–tte with Treasury Secretary John Snow, which peaked the attention of many conference attendees. Snow asked `how big is the biggest credit union,’ to which Becker replied $20 billion. “A long pause,” Becker relayed. “(Snow) asked who is it and I answered Navy Federal Credit Union.” Snow went on to say $20 billion “sounds like the size of a bank,” Becker said. “I told him two-thirds of (Navy’s) service centers overseas operate at a loss.” Becker pointed out that Snow used to run CSX, “one of the largest for-profit companies” in the nation. “I asked him what would CSX do if some of its centers were operating at a loss,” Becker told attendees. Snow shot back `why would we do that.’ Becker said small community banks are among the 10 fastest growing businesses. On credit unions converting to banks, he said “this is a free country, (they) can adopt a business model that works for them but they need to offer full disclosure to the members.” [email protected]