Stating he wants to set the record straight, NAFCU President/CEO B. Dan Berger told Rep. Steve King (R-Iowa) that some banks – and not credit unions – may deserve additional scrutiny from the Government Accountability Office.
“Perhaps the banking industry is the one that needs the real study, given that nearly one-third of banks are Subchapter S corporations that pay no corporate income tax,” Berger wrote in a rebuttal to King's call for a GAO report that would help determine whether credit unions still deserve their current tax exemption.
In a letter sent Monday to House Ways and Means Chairman Kevin Brady (R-Texas), King stated the credit union tax exemption will cost some $10 billion over the next five years.
He requested that Brady ask the GAO to update a 2006 study on credit unions. House Ways and Means Committee staff said they are still checking to see if Brady had prepared a response for King.
In his letter to King, Berger said shortly after the GAO report was released, “reckless actions by banks caused the economy to collapse and created the need for a TARP bailout of hundreds of billions of dollars.”
He added the banking industry has been hit with more than $100 billion in fines, settlements and buy-backs as a result of the crisis.
In addition, he said there are 1.1 million credit union members in King's home state of Iowa and that consumers in the Hawkeye State benefitted by some $1.4 billion between 2005 and 2013 as a result of the institutions.
He also disputed King's notion that business lending caps have been adjusted, saying the NCUA had simply removed the red tape that many businesses faced when seeking such assistance.
Berger added a 2011 study commissioned by the Small Business Administration found bank business lending had largely been unaffected by changes in credit union business lending.
Finally, Berger contradicted King's assertion that the NCUA has vastly expanded the number of people eligible for credit union membership, noting the agency has not adjusted field of membership rules.
“It is true that credit union membership has grown, but mainly from consumers fleeing the predatory practices of banks and turning to credit unions,” Berger told King.
He added the NCUA has not operated without congressional supervision, noting the House Financial Services Committee held an oversight hearing on the agency earlier before Congress.
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