I was disappointed that CUNA and NAFCU have taken the position that converting credit unions should pay future corporate stabilization fund assessments. I see this as an exit tax on credit unions. I see it as contrary to the principles of charter choice and free markets. I object to any exit tax for the following reasons.

Many credit unions paid a huge price for the collapse of the corporate credit union system when they lost the capital that was invested in the corporate credit union system. SAFE lost $13 million of Wescorp Capital. No one is going to recompense SAFE for capitalizing the corporate credit union system. The capital we provided benefited the entire credit union system. In a few short years when the disastrous new NCUA corporate credit union regulation reaps its harvest of unintended natural person credit union investment losses, the credit union movement will understand how much all credit unions benefited from that capital and the corporate credit union system. The corporate system, in hindsight, will be found to have managed investments far better than individual credit unions will manage them. It is a fallacy to argue that imposing an exit fee on converting credit unions to pay for the stabilization costs brings fairness to who pays for the corporate credit union meltdown.

Congress clearly intended for credit unions to have the option to convert to a mutual savings bank charter. The CUNA and NAFCU proposal are an exit tax that has the effect of punishing those who leave by making them bear an unknown and unknowable future cost. CUNA and NAFCU are both on record as doubting the estimates that the NCUA has made on corporate credit union losses. The Congressional Budget Office has also questioned the NCUA's loss estimates. Both CUNA and NAFCU are on record as saying the estimates are too high and so far unsupported. Yet CUNA and NAFCU propose to extract exit payments based on those dubious estimates. I see this proposal as nothing short of obstructing congressional intent by imposing an exit tax.