Senate Finance Chairman Grassley Reassures Credit Unions on Tax Exemption
“Quite frankly I don’t think you need to be worried about being taxed."
The chairman of the Senate’s tax-writing committee assured credit unions that he does not expect Congress to eliminate the credit union tax exemption anytime soon.
“Quite frankly I don’t think you need to be worried about being taxed,” Senate Finance Chairman Charles Grassley (R-Iowa) told those attending CUNA’s Governmental Affairs Conference.
Grassley was one of several lawmakers who spoke at GAC on Wednesday.
And credit union representatives have been spending the last couple of days visiting Capitol Hill. That has not gone unnoticed by banking trade groups, CUNA Chief Advocacy Officer Ryan Donovan said.
“We saw the Independent Community Bankers of America blast the Hill” with literature criticizing credit unions. Donovan added, “You’re going to be asked about it.”
Grassley’s position on the tax issue is much different than those of his predecessor, former Sen. Orrin Hatch (R-Utah) who, in his last year in office in 2018, raised the possibility of requiring large credit unions to pay taxes or at least requiring them to file tax returns disclosing more of their expenses.
Grassley also lamented Congress’ failure to pass data security legislation.
“It’s a tough issue to get agreement on,” he said. “The status quo doesn’t work and shouldn’t be accepted.”
On another hot-button issue, Sen. Cory Gardner (R-Colo.), a primary sponsor of legislation that would provide financial institutions with a safe harbor for doing business with cannabis-related businesses, said he believes the Senate can pass the legislation.
Senate Banking Chairman Mike Crapo (R-Id.) has said he has serious reservations about the bill.
But Gardner said that bill supporters are working with Crapo in an effort to alleviate his fears, some of which are public health issues.
“I believe that in a matter of months, we can have a vote,” he said. “I am very optimistic about moving this legislation forward.”
But Rep. Steve Stivers (R-Ohio) said that Crapo wants to place limits on the amount of THC that may be contained in cannabis if businesses are seeking financial services.
Stivers said he is concerned about requiring financial institutions to supervise that, adding that credit unions should not become the “THC Police.”
Rep. Blaine Luetkemeyer (R-Mo.) said he is continuing to find ways to kill the Current Expected Credit Loss standard.
“This can’t happen,” he said. “We have to push back on this.”
He said he is sponsoring legislation that would require rules issued by the Financial Accounting Standards Board, which issued the CECL standard. Under current law, FASB is not required to go through the formal rule-making process, which includes allowing public comment on its proposals.