Rep. Steve King (R-Iowa) said he wants the Government Accountability Office to update a 2006 report on credit unions' tax exemption, noting legislative and regulatory changes have continued to blur the lines between credit unions and other depository institutions.
In a letter sent Monday to House Ways and Means Chairman Kevin Brady (R-Texas), King stated the credit union exemption will cost some $10 billion over the next five years and that the GAO study found weaknesses in NCUA oversight.
"I believe that Congress has a responsibility to all American taxpayers to ensure credit unions and all 'not-for-profits'" missions properly align with good public policy," King wrote.
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King's request coincides with many Republicans' requests for comprehensive tax reform. Such a plan won't be considered this year, but may be taken up next year. Earlier this year, ABA President/CEO Rob Nichols sent a letter to Brady stating credit unions have outgrown the need for the tax exemption.
In his letter, King accused the NCUA of implementing rules that have expanded credit union membership and commercial lending authority despite limitations contained in the law.
"The rules were also implemented after Congress rejected industry attempts to pass those measures through the legislative process," King wrote.
King said the 2006 GAO report examined several issues, including the NCUA's efforts to expand services to low- and moderate-income consumers, credit union rates in comparison to those offered by other similar institutions, other business tax issues and the transparency of credit union senior executive compensation.
The 2006 study said credit unions had been slow in offering services to low-and moderate-income people. In addition, the GAO said credit unions were able to offer rates that were more favorable than banks, although it also said it could not attribute that to its tax-exempt status. Finally, the GAO said credit unions were not properly transparent about executive compensation.
NCUA Public Affairs Specialist John Fairbanks declined to comment on King's request.
King generated controversy at the Republican National Convention this week in an interview with MSNBC.
"This 'old, white people' business does get a little tired," he said in the interview. "I'd ask you to go back through history and figure out, where are these contributions that have been made by these other categories of people that you're talking about – where did any other subgroup of people contribute more to civilization?"
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