Iowa Credit Unions Win Fight With Bankers Over Tax Issue

Iowa credit unions scored a major victory this past weekend, as the state legislature enacted a major tax overhaul measure that does not include new taxes on credit unions.

The Iowa Senate had passed a tax cut plan that would—for the first time—use the same taxation formula for credit unions as is now used for banks. The House did not include that in its tax measure.

And the deal ultimately hammered out by legislators during the past several weeks makes no changes to credit union taxation.

The legislation was the subject of intense lobbying in the Hawkeye State, where bankers argued that as a result of their tax structure, credit unions—particularly the largest ones—had an unfair advantage over banks.

“The voice of the people was heard, and consumer choice wins over dollars in the pockets of bank shareholders. Iowa’s 1.1 million credit union members, along with all Iowa consumers, can continue to benefit from choice and competition,” said Patrick Jury, president/CEO of the Iowa Credit Union League (ICUL).”

“Our industry remained united throughout the bank attacks and we look forward to being able to direct full attention to our mission of improving the financial lives of Iowans,” said Brent Helin, league board chair and CEO of Des Moines Metro Credit Union.

And Jury took a shot at the state’s bankers, adding, “It is time the banking industry focuses on serving their customers instead of wasting time, money and resources attacking credit unions. This money and attention would be better spent helping consumers.”

For their part, the Iowa Bankers Association warned that the fight is not over.

“This issue is not going away, and the IBA will continue to work on this issue in preparation for the 2019 legislative session,” the IBA said, in a statement. “Convincing the Iowa Legislature to implement tax equity for all financial institutions will require a continued statewide effort from Iowa bankers as well. advocacy efforts.”