WASHINGTON – Rep. John Larson (D-Conn.), a member of the House Ways & Means Committee, told Credit Union Times on Tuesday that the committee's latest tax reform draft protects the credit union tax exemption. House Ways and Means Committee Chairman Dave Camp (R-Mich.) is expected to release the draft this week.
“Yeah, that's in good shape … but this is a draft. So, as I said out there, vigilance is eternal in terms of making sure that people get their message here on Capitol Hill,” Larson said after his speech at CUNA's Governmental Affairs Conference.
“It's nothing against community bankers, I understand their position, they serve a vital role and function too, but to go after the credit unions on this, I think it is more than a little unfair,” he added.
Credit Union Times also asked Larson if he would support a tax reform package that taxes credit unions.
“We're committed to protecting the exemption,” he said in response.
Larson said bankers advocating for the end of the exemption are “not looking at the full picture” or the services that credit unions provide.
Banking lobbies are working hard to counter the advocacy efforts of GAC attendees this week. On Tuesday, the American Bankers Association sent an email to lawmakers urging them to eliminate the credit union tax exemption.
“Today, you will receive a printed copy of ABA's recent information brochure that describes how credit unions have outgrown their original mission, and their favorable tax treatment,” the email said.
Credit unions make large loans to affluent members and for large commercial projects, which ignores their mission, the ABA said. Credit unions are also aggressively growing membership by stretching the common bond beyond recognition, and are spending inappropriately on naming rights to arenas and bowl games. Those points, the ABA said, underscore the need to tax credit unions.
“This evidence indicates that credit unions have drifted from their original mission, and have outgrown their special tax-exempt status. Congress, why should taxpayers pay more in taxes so that credit unions can pay none?” the ABA's email said.
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