WASHINGTON — The American Bankers Association lauded Treasury Secretary Henry Paulson on the department's efforts to decrease corporate tax rates for competitiveness in the global market, in part on the backs of credit unions.

"Identifying wasteful uses of tax preferences is an excellent way to make the tax system more equitable," ABA President/CEO Ed Yingling wrote in a letter to Secretary Paulson. "One such wasteful tax preference–which is noted in you report in Table 2.1–is the tax exemption for credit unions."

He continued, "Credit unions have a mandate to serve people of 'modest means.' Their tax exemption exists for this purpose, as recently was documented in hearing before the House Committee on Ways and Means in 2005. Many traditional credit unions continue to hold true to this mission. However, a newer breed of credit union has grown rapidly, leveraging their tax-preferred status, and serving only those segments of the community they choose to serve."