Sept. 14, 2012 – Credit unions should pay close attention to tax reform and sequestration because “it’s going to happen quickly” following the November elections, cautioned Rep. Shelley Moore Capito, R-W.Va., at NAFCU’s Congressional Caucus yesterday.
Capito, who chairs the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, said those issues will be handled by the House Ways and Means Committee and Appropriations and not the House Financial Services Committee. Though the credit union tax exemption has not been explicitly proposed for elimination, Congress will be taking a close look at tax expenditures, which by definition include the credit union tax exemption.
Capito also discussed the field hearings her committee held this year examining how the current regulatory environment is affecting local financial institutions’ ability to spur job creation. A key finding from those hearings was that financial institutions often face inequities during examination procedures. This specific issue is addressed in H.R. 3461, a bill introduced by Capito that would establish a new appeal process for exam disputes.
Noting her long history of support for credit unions, House Financial Services Committee Member Maxine Waters, D-Calif., told attendees she is “always open” to reviewing the regulatory regime to make sure it’s working appropriately for credit unions. In making this point, Waters noted her support for H.R. 4367, a bill sought by NAFCU to repeal the ATM placard requirement on fee disclosures under the Electronic Funds Transfer Act.
Sen. Bernie Sanders, I-Vt., who spent much of his time speaking on income inequities and the shrinking of the middle class, expressed his support for legislation that would increase credit unions’ member business lending authority, currently capped at an arbitrary 12.25 percent of total assets. He told attendees that “we’re going to do everything we can” to help credit unions make more loans to small businesses.
House Financial Services Chairman Spencer Bachus, R-Ala., noted the Dodd-Frank Act's detrimental impact on credit unions and other small institutions. “We are suppressing job growth” with all these regulations, he said. To drive home just how onerous the current regulatory environment is, Bachus pointed out that it took 20 million man hours to build the Panama Canal. It takes over 24 million man hours per year to comply with Dodd-Frank Act rules, he said.
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