WASHINGTON — A recent Treasury analysis highlights the repealing the credit union tax-exemption as one of the key methods of increasing tax breaks for corporations, which CUNA stated is entirely unacceptable.

Pointing to letters obtained by the group from President George W. Bush that said the president believed credit unions should maintain their tax-exemption, CUNA President/CEO Dan Mica objected to the Treasury Conference on Business Taxation and Global Competitiveness Background Paper proposal. He wrote, "To achieve the goal of reduced corporate income taxes, the paper focuses on repealing various business tax breaks, listing the exemption of credit union income among the preferences. Such a listing wholly contradicts the 2004 letter to CUNA from President Bush in which he stated, "I support strongly the tax-exempt status of credit unions, and will continue to highlight the important contributions that credit unions make to our financial system."

He continued, "While silent on the substantial benefits of credit unions to consumers, the paper lauds Subchapter S Corporations, characterizing many of them as "small." Yet an April Government Accountability Office study showed that Subchapter S banks, which are often quite large (two have over $10 billion in assets), cost the federal government $726 million in lost revenues in 2006." The Government Accountability Office has reviewed other bank tax preferences as well, which came to a total of $1.3 to $1.9 billion by CUNA's figuring.